Effects of parameter mismatches in synchronized time series are studied first for an analytical non-linear dynamical system (coupled logistic map, CLM) and then in a real system (Electroencephalograph (EEG) signals). The internal system parameters derived from GP analysis are shown to be quite effective in understanding aspects of synchronization and non-synchronization in the two systems considered. In particular, GP is also successful in generating the CLM coupled equations to a very good accuracy with reasonable multi-step predictions. It is shown that synchronization in the above two systems is well understood in terms of parameter mismatches in the system equations derived by GP approach.

Private, voluntary compliance programs, promoted by global corporations and nongovernmental organizations alike, have produced only modest and uneven improvements in working conditions and labor rights in most global supply chains. Through a detailed study of a major global apparel company and its suppliers, this article argues that this compliance model rests on misguided theoretical and empirical assumptions concerning the power of multinational corporations in global supply chains, the role information (derived from factory audits) plays in shaping the behavior of key actors (e.g., global brands, transnational activist networks, suppliers, purchasing agents, etc.) in these production networks, and the appropriate incentives required to change behavior and promote improvements in labor standards in these emergent centers of global production. The authors argue that it is precisely these faulty assumptions and the way they have come to shape various labor compliance initiatives throughout the world—even more than a lack of commitment, resources, or transparency by global brands and their suppliers to these programs—that explain why this compliance-focused model of private voluntary regulation has not succeeded. In contrast, this article documents that a more commitment-oriented approach to improving labor standards coexists and, in many of the same factories, complements the traditional compliance model. This commitment-oriented approach, based on joint problem solving, information exchange, and the diffusion of best practices, is often obscured by the debates over traditional compliance programs but exists in myriad factories throughout the world and has led to sustained improvements in working conditions and labor rights at these workplaces.

We examine how far taxes on corporate income are directly shifted onto the workforce. We use data on 55,082 companies located in nine European countries over the period 1996–2003. We identify this direct shifting through cross-company variation in tax liabilities, conditional on value added per employee. Our central estimate is that the long run elasticity of the wage bill with respect to taxation is -0.093. Evaluated at the median, this implies that an exogenous rise of $1 in tax would reduce the wage bill by 75 cents. We find only weak evidence of a difference for multinational companies.

Auerbach, Alan J. and Devereux, Michael
(2009)
Destination-based corporation taxes.
In: Annual Symposium 2009, 09/07/09, Centre for Business Taxation, University of Oxford.
Full text not available from this repository.

B

We study how, at times of CEO transitions, the identity of the CEO successor shapes labor contracts within family firms. We propose an alternate view of how family management might underperform relative to external management in family firms. The idea developed in this paper is that, in contrast to external professionals, CEOs promoted from within the family not only inherit control of the firm but also inherit a set of implicit contracts that affects their ability to restructure the firm. Consistent with our dynastic commitment hypothesis, we find that family-promoted CEOs are associated with lower turnover of the workforce, lower wage renegotiation, and greater loyalty for the incumbent workforce.

Thousands of scholars and millions of dollars are devoted to the study of management. In the last decade, the number of active members of the Academy of Management has increased by more than 50 percent, to 17,607 members. The number of management journals continues to grow as well. These rates of growth suggest that many academics are seeing benefit from management research, but not every study produces as much benefit as it might, and in aggregate, management research has not advanced managerial knowledge as much as many desire. Can we do better? This symposium offers five perspectives on how researchers and their societies can get more value from these significant investments of careers and money. The speakers draw on their extensive experiences – three have served as presidents of the Academy of Management and another is the president-elect – to find opportunities for higher yields of knowledge or societal benefits. In aggregate, they offer a set of actionable ideas that get us beyond bemoaning our current state and put us on a path toward better creation, accumulation, and dissemination of management knowledge.

Barnett, Michael L.
(2009)
Toward a reputational theory of the industry.
In: 13th International Conference on Corporate Reputation, Brand, Identity, and Competitiveness, May 2009, Amsterdam, The Netherlands.
(Unpublished)
Full text not available from this repository.

The purpose of this paper is to critically evaluate the instrumental perspective on Corporate Social Responsibility (CSR) in practice and theory by relying on sociological analyses of a well known organization: the Italian Mafia. Legal businesses might share features of the Mafia, such as the propensity to exploit a governance vacuum in society, a strong organizational identity that demarcates the inside from the outside, and an extreme profit motive. Instrumental CSR practices have the power to accelerate a firm's transition to Mafia status through its own pathologies. The boundaries of such instrumentalism are explored and lessons for future CSR research derived, with specific emphasis on a firm's social and normative embeddedness, taking into account the inherent challenge of regulating corporate behaviour in the global economy.

This article reports a unique analysis of private engagements by an activist fund. It is based on data made available to us by Hermes, the fund manager owned by the British Telecom Pension Scheme, on engagements with management in companies targeted by its UK Focus Fund. In contrast with most previous studies of activism, we report that the fund executes shareholder activism predominantly through private interventions that would be unobservable in studies purely relying on public information. The fund substantially outperforms benchmarks and we estimate that abnormal returns are largely associated with engagements rather than stock picking.

This paper considers theory-based expectations on the evolution of tax structures in developed countries and confronts them with stylised facts from aggregate tax revenue data. A bilateral similarity index is introduced which allows the measurement of the similarity of tax systems conditional on country characteristics. A slow but steady convergence in tax revenue structures is found which depends on the proximity, similarity and exchange between a given pair of countries.

The European Union provides coordination and financing of trans-European transport infrastructures, i.e. roads and railways, which link the EU Member States and reduce the cost of transport and mobility. This raises the question of whetherEU involvement in this area is justified by inefficiencies of national infrastructure policies. Moreover, an often expressed concern is that policies enhancing mobility may boost tax competition. We analyse these questions using a model where countries compete for the location of profitable firms. We show that a coordination of investment in transport cost reducing infrastructures within union countries enhances welfare and mitigates tax competition. In contrast, with regard to union periphery infrastructure, the union has an interest in a coordinated reduction of investment expenditures. Here, the effects on tax competition are ambiguous. Our results provide a rationale for EU-level regional policy that supports the development of intra-union infrastructure.

The standard tax theory result that investment should not be distorted is based on the assumption that profits are locally bound. In this paper we analyze the optimal tax policy in a model where firms are internationally mobile. We show that the optimal policy response to increasing firm mobility may be taxation, subsidization or non-distortion of the marginal investment, depending on whether the mobile firms are more or less profitable than the average firm in the economy. Our findings may contribute to understanding recent tax policy developments in many OECD countries.

A model is presented of the tax competition and tax effects on enterprise decisions. The role of multinational enterprises and whether and to what extent they aggravate the tax competition between states is explored. Newer empiric analyses show that tax competition is on the increase and could weaken international companies rather than strengthen.

Many investors purchase mutual funds through intermediated channels, paying brokers or financial advisors for fund selection and advice. This article attempts to quantify the benefits that investors enjoy in exchange for the costs of these services. We study broker-sold and direct-sold funds from 1996 to 2004, and fail to find that brokers deliver substantial tangible benefits. Relative to direct-sold funds, broker-sold funds deliver lower risk-adjusted returns, even before subtracting distribution costs. These results hold across fund objectives, with the exception of foreign equity funds. Further, broker-sold funds exhibit no more skill at aggregate-level asset allocation than do funds sold through the direct channel. Our results are consistent with two hypotheses: that brokers deliver substantial intangible benefits that we do not observe and that there are material conflicts of interest between brokers and their clients.

This paper explores the economic consequences of proposed EU reforms for a common consolidated corporate tax base. The reforms replace separate accounting with formula apportionment as a way to allocate corporate tax bases across countries. To assess the economic implications, we use a numerical CGE model for Europe. It encompasses several decision margins of firms such as marginal investment, FDI decisions, and multinational profit shifting. The simulations suggest that consolidation does not yield substantial welfare gains for Europe. The variation of effects across countries is large and depends on the choice of the apportionment formula. Consolidation with formula apportionment does not weaken incentives for tax competition. Tax competition instead offers a rationale for rate harmonisation, in addition to base harmonisation.

The impact of clusters on entrepreneurship has not been adequately and formally substantiated through empirical analysis. This dissertation looks at the effect of clusters on entrepreneurship at the regional level in the United Kingdom and a comparison is made with a similar study already carried out in Germany. A combination of Global Entrepreneurship Monitor data with Eurostat, European Cluster Observatory, European Innovation Scoreboard, and the UK Office of National Statistics data is used on the UK’s 37 NUTS 2 EU structural fund assistance regions to test the hypotheses regarding entrepreneurship, clusters, and innovation. A logistic regression model result reinforced further by a Generalised Linear Latent and Mixed Model, and a random intercept logit model showed that there is a positive impact of clusters on entrepreneurship. Formalizing the relationship between clusters and entrepreneurship can help practitioners and policymakers to make informed choices, conduct better monitoring, and to make better forecast nascent clusters for potential success or failure in terms of propagating entrepreneurship.

The Lean Toolbox 4th Edition, the Essential Guide to Lean Transformation' is written for practitioners and for students, and is the extensively revised version of the best selling 'The New Lean Toolbox'. The book has sections on The Philosophy of Lean, Value and Waste, Transformation Frameworks, Deployment, Preparing for Flow, Mapping, Layout and Cell Design, Scheduling, TOC, Quality, Improvement, Managing Change, Sustainability, New Product Development, The Lean Supply Chain, and Accounting and Measurement.

Many collective human activities, including violence, have been shown to exhibit universal patterns1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19. The size distributions of casualties both in whole wars from 1816 to 1980 and terrorist attacks have separately been shown to follow approximate power-law distributions6, 7, 9, 10. However, the possibility of universal patterns ranging across wars in the size distribution or timing of within-conflict events has barely been explored. Here we show that the sizes and timing of violent events within different insurgent conflicts exhibit remarkable similarities. We propose a unified model of human insurgency that reproduces these commonalities, and explains conflict-specific variations quantitatively in terms of underlying rules of engagement. Our model treats each insurgent population as an ecology of dynamically evolving, self-organized groups following common decision-making processes. Our model is consistent with several recent hypotheses about modern insurgency18, 19, 20, is robust to many generalizations21, and establishes a quantitative connection between human insurgency, global terrorism10 and ecology13, 14, 15, 16, 17, 22, 23. Its similarity to financial market models24, 25, 26 provides a surprising link between violent and non-violent forms of human behaviour.

We re-examine the extent to which personal taxes on dividends are capitalised into the equity prices of domestic firms, using data from around the time of the 1997 UK dividend tax reform, which removed a significant tax credit for an important group of investors: UK pension funds. The tax-adjusted CAPM suggests that the impact should depend on an average of dividend tax rates across all investors, and that UK pension funds should reduce their holdings of the previously tax-favoured asset: UK equities. Given that UK pension funds are small relative to the total size of the world capital market, a small open economy-type argument implies that the main effect of the reform would be to reduce UK pension funds’ ownership of UK equities, with little impact on the price of UK equities. We present evidence which is consistent with these hypotheses. We discuss why previous research (Bell and Jenkinson, 2002) reached the different conclusion that this tax reform had a large negative impact on UK share prices.

We present cross-country empirical evidence on the role of natural resources in explaining long-run differences in private investment as a share of GDP in a sample of 72 developing countries. Our empirical results suggest important differences between oil and non-oil resources. While revenue from oil exports tends to increase private (and public) investment, there is also a robust negative effect from a measure of export concentration. After controlling for these two aspects of export structure, there is little additional information in other measures of resource abundance, or in other suggested investment determinants, such as measures of the quality of institutions, political instability or macroeconomic volatility.

We propose a research agenda that can assist in developing a dynamic and comprehensive theory of boards of directors. It is based upon the concept of temporality, with time being organised around the life-cycle metaphor, and integrates research on agency theory, decision-making theory and resource dependence theory. We identify three key roles of boards of directors: (1) monitoring and controlling top management; (2) involvement in strategic decision-making; and (3) providing access to resources and networks. Our analysis suggests that boards perform all three roles, but that these roles change over time. We propose clear researchable questions for each stage of the organisational life cycle as well as the transition between the stages.

Item type

Article

Subject(s)

UNSPECIFIED

Uncontrolled keywords

research methods; board of directors, corporate governance, organisational life cycle

We develop a theory’ and empirical test of how the legal system affects the relationship between venture capitalists and entrepreneurs. The theory uses a double moral hazard framework to show how optimal contracts and investor actions depend on the quality of the legal system. The empirical evidence is based on a sample of European venture capital deals. The main results are that with better legal protection, investors give more non-contractible support and demand more downside protection. These predictions are supported by the empirical analysis. Using a new empirical approach of comparing two sets of fixed-effect regressions, we also find that the investor’s legal system is more important than that of the company in determining investor behavior.

A growing body of research has challenged the commonly acceptedview that multinationals have evolved into globally integratednetworks, demonstrating instead that such organizations aresites of conflict between competing rationalities emerging fromdistinctive national institutional contexts. However, this research hasneglected professional service firms (PSFs) in spite of them oftenbeing held as exemplars of the integrated network model. Thisarticle redresses this imbalance by focusing, in particular, on how PSFsseek to coordinate the horizontal flow of their human resources asa mechanism of inter-unit knowledge sharing. Drawing upon interviewsin four PSFs, I show that these organizations have developedresource management systems that cannot simply be reduced tonational institutional contexts. However, I also demonstrate that theprocess of resource management is subject to inter-unit conflicts thatundermine its raison d’être. I argue that these tensions are symptomaticof both the Anglo-American model of multinational managementand cross-national differences in market conditio

Meticillin-resistant Staphylococcus aureus (MRSA) infection in the UK receives intense media attention. The nature of coverage, political responses and solutions offered has been questioned and the relationship between health professionals, the media and government policy needs greater understanding. We identified 2880 articles on MRSA published in 12 UK newspapers between 1994 and 2005, compared with 21 articles in six major US newspapers. To investigate the relative influences and relationships further, 68 weeks of coverage from 1990 to 2004 were analysed. The dates were selected based on publication dates of the ten most frequently cited articles on MRSA according the ISI Web of Science portal of Department of Health press releases on MRSA since 1997. Within this period, 351 news articles were published with members of the public and politicians representing 60% of sources quoted. Scientific articles, even those with the highest number of citations, have negligible influence on newspaper coverage. Simple solutions quoted in the newspaper articles focused almost exclusively on cleaning. The UK press exhibits a high interest in MRSA compared with that of the USA. Healthcare workers, experts and professional bodies have criticised the nature of media reporting, but have had little influence or involvement in the press. This may facilitate journalists, celebrities, the public and politicians to drive these stories unchecked and allow politics to address only the simplistic solutions generated.

To be effective, infection prevention and control must be integrated into the complex and multiple interlinking systems within a hospital’s management structure. Each of the systems must consider how activity associated with it can be optimised to minimise infection risk to patients. The components of an organisational structure to achieve these quality assurance and patient safety aims are discussed. The use of performance management tools in relation to infection control metrics is reviewed, and the use of hospital-acquired infection as a proxy indicator for deficiencies of system management is considered. Infection prevention and control cannot be the role and responsibility of a single individual or a small dedicated team; rather it should be a priority at all levels and integrated within all management systems, including the research and educational agendas.

Although emergent systems have presented us with powerful modeling and optimization mechanisms, often measures of control are necessary to prevent unwanted emergence. In cases where messaging has to be kept to a minimum, central control approaches are not always favorable or feasible; while distributed control approaches could provide an alternative. In this paper, we present a new distributed control strategy: "lying agents'', whose functionality can be switched on to distract other agents from harmful behavior. We implement this strategy in the particle swarm and the ant colony optimization algorithms to study the problem of the tragedy of commons. The simulation results show that the distributed control strategy is powerful in achieving trade-off behaviors, although dependant on various factors in different algorithms, such as lying locations, liars' pheromone strength or the number of liars. The strategy can be used in many applications, some of which are given throughout the paper.

The effectiveness of the maintenance scheduling decision depends on the availability of information regarding the remaining useful life of the asset in addition to the asset operating schedule and spares and resources required to carry out the maintenance action. In this paper, we illustrate an integrated asset maintenance approach using a lab-based demonstrator where a washing machine unit is deployed as the “asset”. The condition of the washing machine is assessed using data from a number of embedded wireless sensors to monitor critical parameters. The configuration of the washing machine is monitored using Radio Frequency Identification (RFID) tags. In addition to the condition monitoring platform, the demonstrator includes a supply chain platform with RFID infrastructure to provide real-time tracking information to predict the availability of spare parts within a given time horizon. Information from the condition monitoring platform and the supply chain tracking platform is then fed to a decision support system (DSS) which uses the available information to optimise the total cost of maintenance and decide the following parameters: (a) timing of maintenance, (b) choice of the appropriate spare part, (c) choice of the repair personnel.

This paper argues that profit-shifting activities of multi-jurisdictional enterprises (MJE) are maintained under a tax system of consolidation and formula apportionment (FA). A theoretical model discusses how an MJE can exploit its impact on the definition of the consolidated group strategically. The analysis shows that the MJE will run individual affiliates as separate un-consolidated firms for tax purposes if intra-group tax-rate differences, and thereby potential gains from profit-shifting, are large. We test this prediction using confidential firm-level tax-return data for the local business tax in Germany. The identification strategy exploits a quasi experiment derived from a major company tax reform in 2001 that reduced the costs associated with separating out individual affiliates. Our results show that, evaluated at the sample mean, an increase in the tax-rate variance among the MJE’s affiliates by one standard deviation reduces the number of consolidated affiliates by 20%.

Many questions about institutional trading can only be answered if one tracks high-frequency changes in institutional ownership. In the United States, however, institutions are only required to report their ownership quarterly in 13-F filings. We infer daily institutional trading behavior from the tape, the Transactions and Quotes database of the New York Stock Exchange, using a sophisticated method that best predicts quarterly 13-F data from trades of different sizes. We find that daily institutional trades are highly persistent and respond positively to recent daily returns but negatively to longer-term past daily returns. Institutional trades, particularly sells, appear to generate short-term lossespossibly reflecting institutional demand for liquiditybut longer-term profits. One source of these profits is that institutions anticipate both earnings surprises and post-earnings announcement drift. These results are different from those obtained using a standard size cutoff rule for institutional trades.

Investments in infrastructure are a large burden on a country’s gross domestic product. For example, in the year 2005 the Dutch government invested about 8 billion euros (CBS, 2005 in KIM, 2007) in infrastructure, which amounts to 1.55% of the gross domestic product of that year. This large amount is an even greater concern if one recognises the inefficient allocation of financial resources involved in infrastructure planning as a consequence of decisions taken by decision makers based on misinformation (Flyvbjerg, 2005, De Bruijn and Leijten, 2007). Estimates of the costs and benefits) of projects are inaccurate and consequently the ranking of projects based on project viability is inaccurate as well. Inevitably, this incorporates the danger that eventually inferior projects are implemented, that resources are used which could have been assigned more appropriately, and that projects are implemented which cannot recover their costs

Lock-in, the escalating commitment of decision makers to an ineffective course of action, has the potential to explain the large cost overruns in large-scale transportation infrastructure projects. Lock-in can occur both at the decision-making level (before the decision to build) and at the project level (after the decision to build) and can influence the extent of overruns in two ways. The first involves the ‘methodology’ of calculating cost overruns according to the ‘formal decision to build’. Due to lock-in, however, the ‘real decision to build’ is made much earlier in the decision-making process and the costs estimated at that stage are often much lower than those that are estimated at a later stage in the decision-making process, thus increasing cost overruns. The second way that lock-in can affect cost overruns is through ‘practice’. Although decisions about the project (design and implementation) need to be made, lock-in can lead to inefficient decisions that involve higher costs. Sunk costs (in terms of both time and money), the need for justification, escalating commitment, and inflexibility and the closure of alternatives are indicators of lock-in. Two case studies, of the Betuweroute and the High Speed Link-South projects in the Netherlands, demonstrate the presence of lock-in and its influence on the extent of cost overruns at both the decision-making and project levels. This suggests that recognition of lock-in as an explanation for cost overruns contributes significantly to the understanding of the inadequate planning process of projects and allows development of more appropriate means.

Accredited education programmes for major programme managers aim to fulfil a need to equip people aspiring to the role of “Chief Programme Officer”, CPO, a position with equivalence to that of the CEO of a large corporate division with associated responsibilities for delivering the major programme and realising the intended benefits. The context of major programme management is positioned as one with unique challenges, including the need for a major programme to be considered like a large-scale organisation yet having the requirement to adapt its governance structures over time. The learning and development journey that supports people to successful command this position is described along with concerns over the robustness with which this journey is understood.

Cole, Shawn A., Thompson, John and Tufano, Peter
(2009)
Where Does it Go? Spending by the Financially Constrained.
In: Retsinas, Nicolas P. and Belsky, Eric S., (eds.)
Borrowing to Live: Consumer and Mortgage Credit Revisited.
Brookings Institution, pp. 65-91.
ISBN 978-0815774136
Full text not available from this repository.

Abstract

In this paper, we analyze the spending decisions of over 1.5 million Americans who vary in their degree of revealed credit constraints. Specifically, we analyze how these Americans spend their income tax refunds, using transaction-level data from a stored-value card product. Card-holders may choose among several tax settlement and loan options, effectively receiving cash as much as 90 days earlier than would have been possible without a settlement product. Those selecting earlier settlement options pay higher fees and interest, therefore revealing the level of credit constraints or impatience. We find that more credit constrained or impatient individuals spend their monies more quickly. The mix of cash and merchant transactions is similar between more and less constrained groups. Finally, the primary merchant uses of refunds are to pay for necessities (grocery stores, gas stations, etc.), and the fraction of the refund spending devoted to these necessities is higher for those with greater revealed credit constraints.

The credit crunch was most likely viewed as a mixed blessing by many private equity executives. On the one hand, it signalled the end of the most favourable set of economic conditions the private equity industry had ever witnessed: abundant capital, low interest rates, increasing stock market values and a truly amazing willingness amongst banks and other investors to provide debt financing on a scale and on terms never previously observed. But the clouds that have descended since August 2007 have at least one silver lining: the intense public scrutiny of the private equity industry has been, to some extent, diverted into other areas of the financial system, in particular the investment banks, rating agencies, imploding hedge funds and structured vehicles etc. During this crisis, private equity funds have attracted little attention, except for their activities in taking advantage of banks 19 desire to sell debt backing private equity deals. But the private equity industry remains active, having attracted large amounts of committed capital, and is continuing to invest 13 albeit not in the headline grabbing purchases of large public companies. And public scrutiny is redeveloping.

In this paper I consider the issue of corporate responsibility though a discussion of the types of reasons that may be given for a firm’s actions and outcomes. These reasons may variously be given by the firm as explanation or justification, or by persons affected by the firm as endorsement or critique, or as part of the public policy debate about the scope and limits of a firm’s activities.

To provide a structure for this analysis I outline a model that seeks to describe the possible extent of a firm’s responsibility for the outcomes of its activities through an idea of four dimensions of value. This locates firms along a minimal-maximal spectrum of corporate responsibility, without assuming where this location might be for any particular firm.

I then discuss the question of reasons. This starts with some thoughts about agency and responsibility, and then considers the distinction between various types of reasons. I use the minimal-maximal spectrum to map out the various arguments.

I group the arguments under the following headings: four dimensions of value; a minimal-maximal spectrum of corporate responsibility; reasons and agency: individual responsibility; reasons and agency: corporate responsibility; minimal corporate responsibility; formal and informal reasons; internal and external reasons; reasons and minimal responsibility: four examples of an appeal to ethical significance; wide and narrow instrumentalism; instrumentalism and self interest; further issues; concluding comments.

This arguments presented in this paper are part of an attempt to analyse the conceptual issues that arise from corporate responsibility. Many of these arguments are suggestions, others are more fully developed. I have included both. I hope these ideas stimulate further discussion.

In this paper we set out a series of primarily conceptual arguments. Each argument may suggest further conceptual, empirical and normative analysis. We necessarily make a number of assumptions that we hope are reasonably clear, even where they are considered incorrect or flawed.

We start with a general claim: firms have reasons for acting. We consider some key aspects of, and possible changes to, these reasons. This is of course only one of many starting points for the analysis of firms. We can describe multiple reasons for acting for each firm. However, we seem to recognise that firms ought to take certain actions and aim to produce certain outcomes. This suggests that, to this extent at least, these reasons can be described as ethical reasons.

We focus on two dimensions of a firm’s reasons for acting. The first concerns the responsibility for actions and outcomes; in general this can be described as the degree of corporate responsibility. The second concerns the significance of various financial considerations; in general this can be described as the degree of financialisation.

We suggest that changes to corporate responsibility and financialisation may inform a firm’s reasons for acting. These changes may have more of less significant implications for the firm.

In this article the author reflects on the impact of economic crisis to the retail industry in the future. He notes that the retailing throughout the world will continue to face a challenging environment, especially on the efficiency aspect of retail operations. He talks on retailers move in becoming organized with the focus on efficiency. He also notes that the economic crisis has stressed the retailers' role in inducing consumer demand and in solving economic, social, and environmental issues.

The article presents an interview with Mika Ihamuotila, president chief executive officer (CEO) of Marimekko Corp. Ihamuotila informed about the pricing policy of the company. When asked about the retail marketing for Marimekko, he said that they have a lot of potential to improve their marketing and are placing emphasis public relation. He also informed about the development of the distribution channels.

Information about the Oxford Institute of Retail Management (OXIRM) Asia-Pacific Retail Conference is presented. The event has brought a wide range of local commercial and government participants. Conference attendees have discussed the issues surrounding retail development in India. The global nature of retailing was also tackled at the event.

Cuthbertson, Richard and Piotrowicz, Wojciech
(2009)
Transferring best practices.
In: Rutkowski, Krzysztof, (ed.)
Best Practices in Logistics and Supply Chain Management.
Warsaw School of Economics.
ISBN 978-8373784727
Full text not available from this repository.

D

This article examines the determinants of tax non-compliance when we recognise the existence of an imperfectly competitive "tax advice" industry supplying schemes which help taxpayers reduce their tax liability. We apply a traditional industrial organisation framework to model the behaviour of this industry. This tells us that an important factor determining the equilibrium price and hence, the level of noncompliance, is the convexity of the demand schedule. We show that in this context, this convexity is affected by the distribution of pre-tax income, the progressivity of the tax-schedule and the way in which monitoring and penalties vary with income. It is shown that lower pre-tax income inequality as well as a less progressive tax code may cause more tax minimisation activities. Therefore, the frequently advocated policy of reducing the highest tax rate may fail as a policy directed at improving tax discipline. One way of offsetting the possible harm to tax compliance from a less progressive tax could be an adjustment of the penalty and monitoring functions.

Individuals are typically more likely to repeatedly select alternatives they have a positive impression of. This paper shows that this sequential sampling feature of the information acquisition process might lead to the emergence of illusory correlation between attributes of multi-attribute alternatives. This suggests an alternative explanation for illusory correlation that does not rely on biased information processing. The model also shows that illusory correlation can emerge even when the attributes are independently distributed and the distributions are not skewed.

This paper re-examines the impact of consumption and capital income taxes on (a) the incentive to undertake risky investment and (b) the revenue generated from such taxes. It challenges a well-known claim in the literature that a capital income tax with full loss offset can leave incentives to invest "basically unaffected" because the tax liability is offset by a reduction in the post-tax risk of the investment. Instead, it argues that such a tax would have a significantly negative impact on the incentive to invest.

This report adopts an applied general equilibrium model for the EU27 to study the economic implications of a common corporate tax base in the European Union, either or not combined with consolidation and formula apportionment. The analysis of the common corporate tax base (CCTB) centres around the issue of base broadening versus rate reduction. It emphasises the trade-off between, on the one hand, a low effective marginal tax rate, which minimises distortions in investment and, on the other hand, a low statutory corporate tax rate, which minimises multinational profit shifting to outside locations.The simulation outcomes suggest that the CCTB with a broad base and a reduction in the tax rate will not raise welfare in Europe. In fact, in a world without tax havens and location choice such reform would harm welfare in the EU. However, if tax havens and location choices between the US, Japan and the EU are taken into account, base broadening cum rate reduction will reduce profit-shifting vis-à-vis tax havens and the EU will be able to attract new firms by a lower average effective tax rate, so that welfare in the EU will remain constant on average. For individual member states, who benefit from profit shifting and discrete location, this tax reform may be beneficial. European wide coordination mitigates fiscal spillovers via profit shifting and discrete location within the European Union, which renders high statutory corporate tax rates less distortionary.The common consolidated corporate tax base with formula apportionment (CCCTB) has further implications via compliance costs, the allocation of capital and multinational profits and via the consolidation of losses. Although the debate has not settled yet, we assume in the simulations that consolidation involves a reduction of compliance costs, which benefits all participating countries. Consolidation and formula apportionment affect welfare via an elimination of profit shifting and by replacing existing distortions in capital export neutrality by a distortion induced by the formula factors. The latter render corporate taxes effectively excises on these factors. For individual countries, however, consolidation and formula apportionment does have welfare effects. The consolidation of losses reduces the tax burden on firms, which may yield economic benefit for the EU. Yet, if the reduction of tax revenues is compensated by higher corporate tax rates, this positive effect disappears. Overall, consolidation and formula apportionment tend to yield small welfare gains for the EU on average, but this gain is unevenly distributed across countries.

We investigate the extent to which the corporation tax can act as an automatic stabilizer by smoothing the effects on investment of shocks to income. The main stabilizing effect would be through a reduced tax liability affecting the internal funds available for investment by credit-constrained companies. We present evidence for the United Kingdom that most credit-constrained firms have also been likely to be in a tax loss-making position, implying that the tax does not smooth investment, and thus is not an effective automatic stabilizer. A more generous treatment of tax losses would introduce significantly more automatic stabilization.

To prevent profit shifting by manipulation of transfer prices, tax authorities typically apply the arm’s length principle in corporate taxation and use comparable market prices to ‘correctly’ assess the value of intracompany trade and royalty income of multinationals. We develop a model of heterogeneous firms subject to financing frictions and offshoring of intermediate inputs. We find that arm’s length prices systematically differ from independent party prices. Application of the principle thus distorts multinational activity by reducing debt capacity and investment of foreign affiliates, and by distorting organizational choice between direct investment and outsourcing. Although it raises tax revenue and welfare in the headquarter country, welfare losses are larger in the subsidiary location, leading to a first order loss in world welfare.

Using a large data set of European firms, this paper provides evidence that operations at multinational headquarters are significantly more profitable than operations at their foreign subsidiaries. The effect turns out to be robust and quantitatively large. Our findings suggest that the profitability gap is partly driven by agency costs which arise if value–driving functions are managed by a subsidiary that is geographically separated from the headquarters management. In line with falling communication and travel costs over the last decade, the profitability gap is shown to decline over time. Apart from that, our results indicate that a higher competitiveness of multinational firms in their home markets also contributes to the profitability gap. We discuss various implications of our findings.

Production of fresh vegetables for export has grown rapidly in a number of countries in sub-Saharan Africa over the last decade. This trade brings producers and exporters based in Africa together with importers and retailers in Europe. Large retailers in Europe play a decisive role in structuring the production and processing of fresh vegetables exported from Africa. The requirements they specify for cost, quality, delivery, product variety, innovation, food safety and quality systems help top determine what types of producers and processors are able to gain access to the fresh vegetables chain and the activities they must carry out. The control over the fresh vegetables trade exercised by UK supermarkets has clear consequences for inclusion and exclusion of producers and exporters of differing types, and for the long-term prospects for the fresh vegetables industry in the two major exporting countries studied, Kenya and Zimbabwe.

This paper seeks to understand how small-scale entrepreneurs in Nairobi, Kenya understand the relationship between religion and commerce through an analysis of shop advertising signs. While the sacred and profane are often theorized as mutually exclusive categories, the paper describes how these spheres are fused through the use religion-referencing signs among small businesses. In contrast to the conventional purpose of business signs, shop owners did not use signs to advertise the nature of their business and/or its products to potential customers. Rather the primary motive in selecting a religious name was to communicate with God in order to manage economic uncertainties and achieve material blessings. The paper highlights three factors that influence the religious orientation of business signs: i) the concept of financial blessing embraced in the materialist ethos of the "Prosperity Gospel"; ii) a belief in the ubiquitous presence of good and evil forces, and the need to mediate these forces in the economic sphere; and iii) the importance of moral conduct in the pursuit of financial gain. The paper argues that these factors render shop signs less a form of advertising per se than a bargain with God.

Increasing numbers of corporations are vying to capture one of the largest untapped consumer markets – the world's poor – in ways that are not only economically profitable but socially responsible. One type of initiative that has gained increased traction is trading partnerships between multinational corporations and women's informal exchange networks, creating micro-enterprise opportunities that not only deliver soap and mobile phones, but financial empowerment for women. This article examines one such initiative – the trade in Avon cosmetics. It aims to determine the extent to which the initiative alleviates poverty, and fosters empowerment, among black women in South Africa. It suggests that as unlikely as cosmetics may seem as a vehicle for development, direct sales of beauty products can offer low risk opportunities for women to become entrepreneurs, and form a potentially promising route to gender-equitable poverty reduction.

In most countries applying a value added tax (VAT) system, the activities and transactions undertaken by public sector bodies are not subject to full taxation. The rationale usually invoked to justify lack of full taxation is of a mixed conceptual and political kind. On one hand, there is a view that the activities of those bodies are hard to tax and that, in practice, it is almost impossible to establish a single VAT treatment applicable to all of them. One the other hand, and more importantly, there is a perception that exclusion of the products supplied by public sector bodies from full taxation,achieves social and distributional aims. The rule under the EU VAT system is that supplies by public sector bodies are non–taxable. In practice, however, the VAT treatment of public sector bodies is extremely complex, giving rise to significant legal problems and economic distortions. The aim of this paper is to consider the current legislative framework, with special consideration being given to recent developments in this area, at both legislative and jurisprudential levels, in an attempt to determine whether they constitute positive progress, or whether together they represent a slow and subtle move towards a further deepening of the system’s already existing flaws.

In most countries applying a value added tax (VAT) system, the activities and transactions undertaken by public sector bodies are not subject to full taxation. The rationale usually invoked to justify lack of full taxation is of a mixed conceptual and political kind. On one hand, there is a view that the activities of those bodies are hard to tax and that, in practice, it is almost impossible to establish a single VAT treatment applicable to all of them. One the other hand, and more importantly, there is a perception that exclusion of the products supplied by public sector bodies from full taxation,achieves social and distributional aims. The rule under the EU VAT system is that supplies by public sector bodies are non–taxable. In practice, however, the VAT treatment of public sector bodies is extremely complex, giving rise to significant legal problems and economic distortions. The aim of this paper is to consider the current legislative framework, with special consideration being given to recent developments in this area, at both legislative and jurisprudential levels, in an attempt to determine whether they constitute positive progress, or whether together they represent a slow and subtle move towards a further deepening of the system’s already existing fl

This paper provides a legal and economic analysis of the European Commission’s recent proposals for reforming the application of VAT to financial services, with particular focus on their “third pillar”, under which firms would be allowed to opt-into taxation on exempt insurance and financial services. From a legal perspective, we show that the proposals’ “first and second pillar” would give rise to considerable interpretative and qualification problems, resulting in as much complexity and legal uncertainty as the current regime. Equally, an option to tax could potentially follow significantly different legal designs, which would give rise to discrepancies in the application of the option amongst Member States. On the economic side, we show that quite generally, firms have an incentive to opt-in only on business-to-business transactions. An estimate of the upper bound on the amount of tax revenue that might be lost from allowing opting-in is provided.

Item type

Conference or Workshop Item

Subject(s)

UNSPECIFIED

Uncontrolled keywords

VAT; Europe; Taxation; Financial services industry; Public Finance; Law and legislation; European Commission

de la Feria, Rita
(2009)
The Economic Effects of ECJ Tax Jurisprudence.
In: European Tax Law Guest Lecture, November 2009, Faculty of Law, University of Antwerp, Belgium.
(Unpublished)
Full text not available from this repository.

From the outset, turnover taxes have played a fundamental role in the European integration process. Harmonisation of these taxes was perceived an integral part of achieving a common market, and for this reason it was given priority. Over forty years since the introduction of a common VAT system, VAT is usually regarded as a broadly harmonised tax. Paradoxically, however, it is precisely this high level of harmonisation which seems to have allowed the preservation of some aspects of VAT law which constitute an obstacle to the establishment of the EC internal market. The aim of this paper is to highlight the shortcomings of harmonisation within the VAT area, and namely how harmonisation has prevented the European Court of Justice (ECJ) from applying the EC Treaty provisions to the field of VAT, resulting in the maintenance of laws which could arguably be regarded as contrary to the EC internal market and as restrictions to the fundamental freedoms.

de la Feria, Rita and Fuest, Clemens
(2009)
The Economic Effects of European Tax Jurisprudence.
In: Oxford University Centre for Business Taxation Annual Symposium 2010, 29/06/10, Centre for Business Taxation, University of Oxford.
Link to full text available through this repository.

Abstract

The aim of this paper is to establish whether jurisprudence of the Court of Justice of the European Union (CJ) on corporate tax leads to a more level playing field and increased tax neutrality within the European Internal Market. It uses two rulings as case studies to demonstrate how the jurisprudence of the Court does not necessarily lead to increased neutrality or a more level playing field. The first ruling in Lankhorst-Hohorst regards the compatibility of thin capitalisation with free movement provisions; the second in Marks & Spencer concerns the compatibility of rules on group consolidation with those same provisions. An economic analysis demonstrates that, depending on the reaction of Member States to the ruling, differences in capital costs faced by firms operating in the European Internal Market may increase, whilst GDP and welfare may decrease. Consideration of actual legislative amendments introduced to thin capitalisation rules by Member States following Lankhorst-Hohorst and to group consolidation rules following Marks & Spencer seem to indicate that it is this negative scenario which has prevailed. The paper considers the European constitutional implications of this conclusion.

This paper provides a legal and economic analysis of the European Commission’s recent proposals for reforming the application of VAT to financial services, with particular focus on their “third pillar”, under which firms would be allowed to opt-into taxation on exempt insurance and financial services. From a legal perspective, we show that the proposals’ “first and second pillar” would give rise to considerable interpretative and qualification problems, resulting in as much complexity and legal uncertainty as the current regime. Equally, an option to tax could potentially follow significantly different legal designs, which would give rise to discrepancies in the application of the option amongst Member States. On the economic side, we show that quite generally, when firms cannot coordinate their behaviour, they have an individual incentive to opt-in on business-to-business (B2B) transactions, but not on business-to-consumer (B2C) transactions. We also show that opting in eliminates the cost disadvantage that EU financial services firms face in competing with foreign firms for B2B sales. But, these results do not hold if firms can coordinate their behaviour. An estimate of the upper bound on the amount of tax revenue that might be lost from allowing opting-in is provided for a number of EU countries.

The taxation of financial services is one of the most vexing aspects of a Value Added Tax (VAT). Conceptually, VAT should apply to any fee for service but where financial services are concerned there is a difficulty in identifying the taxable amount, ie the value added by financial institutions. As a result, most jurisdictions, including the EU, simply exempt financial services from VAT. Treating financial services as exempt, however, gives rise to significant legal and economic distortions. Consequently, a few countries have in recent years attempted an alternative VAT approach to financial services. Amongst these is Australia, which in 2000 introduced a Goods and Services Tax (GST) with a ‘reduced input tax credit’ system. This paper compares the current treatment of financial supplies, under a VAT-type system, in the EU and in Australia. The aim is to ascertain whether the Australian GST treatment of financial services is, as commonly thought, superior to the EU one, and consequently, whether introducing an Australian-type model should constitute a policy consideration for the EU.

The primary objective of this paper is to compare five rescheduling strategies according to their effectiveness in reducing entropic-related complexity arising from machine breakdowns in manufacturing systems. Entropic-related complexity is the expected amount of information required to describe the state of the system. Previous case studies carried out by the authors have guided computer simulations, which were carried out in Arena 5.0 in combination with MS Excel. Simulation performance is measured by: (1) entropic-related complexity measures, which quantify: (a) the complexity associated with the information content of schedules, and (b) the complexity associated with the variations between schedules; and (2) mean flow time. The results highlight two main points: (a) the importance of reducing unbalanced machine workloads by using the least utilised machine to process the jobs affected by machine breakdowns, and (b) low disruption strategies are effective at reducing entropic-related complexity; this means that applying rescheduling strategies in order to manage complexity can be beneficial up to a point, which, in low disruption strategies, is included in their threshold conditions. The contribution of this paper is two-fold. First, it extends the application of entropic-related complexity to every schedule generated through rescheduling, whereas previous work only applied it to the original schedule. Second, recommendations are proposed to schedulers for improving their rescheduling practice in the face of machine breakdowns. Those recommendations vary according to the manufacturing organisations' product type and scheduling objectives. Further work includes: (a) preparing a detailed workbook to measure entropic-related complexity at shop-floor level; and (b) extending the analysis to other types of disturbances, such as customer changes.

This paper computes (marginal and average) forward-looking effective tax rates for a sample of more than 650,000 firms in and outside of Europe using Bureau van Dijk’s ORBIS data-base. Comparing the firm-level effective tax rates with their country-level counterparts we arrive at two important findings for empirical research on the behavioral response to taxation. First, the firm-level component of the effective tax burden is generally much more important than the one at the country level. Second, tentative empirical results on the nexus between firm level investment and corporate taxation illustrate that the conclusions obtained with forward looking firm-level effective tax rates differ starkly from those based on country-level forward-looking rates.

This paper assesses the impact of corporate taxation on multinational activity. A numerically solvable general equilibrium model of trade and multinational firms is used to incorporate the following components of corporate taxation: parent and host country statutory corporate tax rates, withholding tax rates, and parent and host country depreciation allowances. We account for their differential impact under alternative methods of double taxation relief (i.e., credit, exemption, and deduction). The hypotheses regarding the effects of changes in the tax parameters are investigated in a panel of bilateral outbound stocks of foreign direct investment (FDI) from 52 parent and 45 host countries for the years 1991 to 2004. For this, we compile annual information on taxation to construct the largest existing panel of tax parameters at the bilateral level based on national tax law and bilateral tax treaties. Our findings indicate that the parent country's statutory corporate tax rate tends to foster outward FDI, whereas the host country's statutory corporate and withholding tax rates are negatively associated with outward FDI. Depreciation allowances exert a significant impact on FDI, as hypothesized.

This paper computes (marginal and average) forward-looking effective tax rates for a sample of more than 650,000 firms in and outside of Europe using Bureau van Dijk’s ORBIS data-base. Comparing the firm-level effective tax rates with their country-level counterparts we arrive at two important findings for empirical research on the behavioral response to taxation. First, the firm-level component of the effective tax burden is generally much more important than the one at the country level. Second, tentative empirical results on the nexus between firm level investment and corporate taxation illustrate that the conclusions obtained with forward looking firm-level effective tax rates differ starkly from those based on country-level forward-looking rates.

We show, in a monetary exchange economy, that asset prices in a complete markets general equilibrium are a function of the supply of liquidity by the Central Bank, through its effect on default and interest rates. Two agents trade goods and nominal assets to smooth consumption across periods and future states, in the presence of cash-in-advance financing costs that have effects on real allocations. We show that higher spot interest rates reduce trade and as a result increase state prices. Hence, states of nature with higher interest rates are also states of nature with higher risk-neutral

International cooperation on export controls for technology is based on three assumptions, that it is possible: to know against whom controls should be directed; to control the international transfer of technology; and to deﬁne the items to be controlled. These assumptions paint a very hierarchical framing of one of the central problems in export controls: dual-use technology. This hierarchical framing has been in continual contention with a competitive framing that views the problem as the marketability of technology. This thesis analyses historical and contemporary debates between these two framings of the problem of dual-use technology, focusing on the multilateral Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies. Using a framework of concepts from Science & Technology Studies and the theory of sociocultural viability, I analyse the Arrangement as a classiﬁcation system, where political, economic, and social debates are codiﬁed in the lists of controlled items, which then structure future debates. How a technology is (not) deﬁned, I argue, depends as much on the particular set of social relations in which the technology is enacted as on any tangible aspects the technology may have. The hierarchical framing is currently hegemonic within Wassenaar, and I show how actors that express this framing use several strategies in resolving anomalies that arise concerning the classiﬁcation of dual-use technology. These strategies have had mixed success, and I show how they have adequately resolved some cases (e.g. quantum cryptography), while other areas have proved much more diﬃcult (e.g. focal plane arrays and computers). With the development of controls on intangible technology transfers, a third, egalitarian framing is arising, and I argue that initial steps have already been taken to incorporate this framing with the discourse on dual-use technology. However, the rise of this framing also calls into question the fundamental assumption of export controls that technology is excludable, and therefore deﬁnable.

This paper investigates the relation between stock liquidity and firm performance. The study shows that firms with liquid stocks have better performance as measured by the firm market-to-book ratio. This result is robust to the inclusion of industry or firm fixed effects, a control for idiosyncratic risk, a control for endogenous liquidity using two-stage least squares, and the use of alternative measures of liquidity. To identify the causal effect of liquidity on firm performance, we study an exogenous shock to liquidity—the decimalization of stock trading—and show that the increase in liquidity around decimalization improves firm performance. The causes of liquidity's beneficial effect are investigated: Liquidity increases the information content of market prices and of performance-sensitive managerial compensation. Finally, momentum trading, analyst coverage, investor overreaction, and the effect of liquidity on discount rates or expected returns do not appear to drive the results.

Organizational routines and capabilities have become key constructs in fields such as organization studies, strategic management, international business, and technology management, as well as certain parts of economics. We discuss the historical origins of the notion of routines and highlight some of the theoretical drift associated with the notion of routines over time. In particular, we note how recent routines-based work has unnecessarily moved the focus (1) from the individual to the collective level, (2) from intentional behavior to unintentional behavior, and (3) from the observable to the non-observable dimension. In parallel we also explicate the underlying theoretical problems of the concept of organizational routines (and associated constructs, such as capabilities); problems such as the lack of conceptual clarity on the origins of routines, and the more general need for microfoundations. We argue that the underlying, individual-level micro-components and interactional dynamics deserve more attention in extant work—calling in effect for a course-correction in work on organizational routines and capabilities. We highlight how an emphasis on (1) the origins of routines, (2) intentionality and exceptions, and (3) aggregation and emergence, provide opportunities to course-correct future research on organizational routines and capabilities.

We argue that Ferraro, Pfeffer, and Sutton build on a scientifically problematic conception of the relationship between theory and social reality. Specifically, the performativity perspective that they build on makes tenuous assumptions about the role that theories, whether true or not, play in strongly constructing social reality, but the perspective fundamentally ignores central matters related to human nature and the boundaries of possibility. We argue for a more realistic approach to theory building and social science, one that recognizes the role that true theories play in helping us understand and explain reality, but also in turn shaping that reality given this better theoretical understanding.

Organizational scholars have recently argued that economic theories and assumptions have adversely shaped management practice and human behavior, not only leading to the incorporation of trust-eroding market mechanisms into organizations, but also unnecessarily creating self-interested behavior. A number of highly influential papers have argued that the self-fulfilling nature of (even false) theories provides the underlying mechanism through which economics has adversely shaped not just social science but also management practice and individual behavior. We question these arguments and argue that there are important boundary conditions to theories falsely fulfilling themselves, boundary conditions that have hitherto been unexplored in organizational research, and boundary conditions that question the underlying premises used by organizational scholars and social scientists to attack economics. We specifically build on highly relevant findings from social psychology, philosophy, and organizational economics to show how (1) objective reality and (2) human nature provide two important boundary conditions for theories (falsely or otherwise) fulfilling themselves. We also defend organizational economics, specifically the use of high-powered incentives in organizations, and argue that self-interest (rightly understood) facilitates in creating beneficial individual and collective and societal outcomes.

Item type

Article

Subject(s)

UNSPECIFIED

Uncontrolled keywords

organization theory and social reality ; organizational economics ; philosophy of social science

This chapter consists of an exchange of ideas about knowledge governance. It aims to seek first principles and microfoundations for the knowledge-based view of organization. Two different opinions and conjectures about knowledge governance are offered and considered broadly. Such matters as the merits of a focus on the individual-level as a starting point for understanding knowledge-related outcomes, what role our underlying epistemologies play in furthering our efforts to understand organizations, whether economic reasoning might help us understand the theory's microfoundations, and so forth are debated. The chapter ends with a discussion of some key emerging micro-foundational issues that it is felt ought to be addressed — perhaps under the knowledge governance label — in the fields of organization theory and strategy.

In this paper we outline an increasingly predominant, “communal,” perspective of the emerging knowledge economy and explore its emphasis on various nonmarket mechanisms of production. Although the communal perspective suggests organizational forms, governance mechanisms, and knowledge processes that may facilitate knowledge creation and knowledge transfer, we argue that it misses the seemingly contradictory trends of organizational disaggregation and the foundational importance of market mechanisms in knowledge creation. We contrast and partly reconcile these two perspectives of the knowledge economy and highlight key considerations related to the microfoundations of knowledge and human capital management.

In this paper, we study the impact of changes in the urban labor force and foreign direct investment on the banking sector, using a dynamic general equilibrium model with a financial sector. Numerical simulations are performed using stylized Chinese data, and bank failures are generated through increases in the growth rate of the labor force, a revaluation of the exchange rate, or an increase in debt issue to finance the government deficit, as compared to a benchmark scenario in which banks remain solvent. Thus bank failures can result from what might seem to be either beneficial economic trends or correct monetary and fiscal policies. We introduce fiscal policies that modify relative factor prices by lowering the capital tax rate and increasing the tax rate on labor. Such policies can prevent banking failures by raising the return to capital. It is shown that such fiscal policies are, in the short run, welfare reducing.

Health systems internationally have developed policies to support evidence-based health care (EBHC) for over a decade. As this article shows, the time is ripe to reviewcurrent policy frameworks in an evidence-based manner. We summarize key themes deriving from qualitative research on the UK EBHC implementation and draw out implications for policy renewal. Our diagnosis is differentfrom current UK NHS (National Health Service) policy since we stress local capacity building rather than top-down frameworks, standardized tools and guidelines. As other jurisdictions demonstrate alternative EBHC policy frameworks, more international comparison and mutual learning is needed.

Pervasive misinformation about the costs, benefits and risks involved is a big problem in major project development. Consequences of misinformation are cost overruns, benefit shortfalls and waste. This chapter identifies optimism bias and strategic misrepresentation as main causes of misinformation. Bias and misrepresentation are problems throughout the project cycle, but the problems are greatest during early project development, because here measures to curb bias and misrepresentation are weakest. Measures for improving early project development are presented, emphasizing accountability and better methods.

The article first describes characteristics of major infrastructure projects. Second, it documents a much neglected topic in economics: that ex ante estimates of costs and benefits are often very different from actual ex post costs and benefits. For large infrastructure projects the consequences are cost overruns, benefit shortfalls, and the systematic underestimation of risks. Third, implications for cost–benefit analysis are described, including that such analysis is not to be trusted for major infrastructure projects. Fourth, the article uncovers the causes of this state of affairs in terms of perverse incentives that encourage promoters to underestimate costs and overestimate benefits in the business cases for their projects. But the projects that are made to look best on paper are the projects that amass the highest cost overruns and benefit shortfalls in reality. The article depicts this situation as ‘survival of the unfittest’. Fifth, the article sets out to explain how the problem may be solved, with a view to arriving at more efficient and more democratic projects, and avoiding the scandals that often accompany major infrastructure investments. Finally, the article identifies current trends in major infrastructure development. It is argued that a rapid increase in stimulus spending, combined with more investments in emerging economies, combined with more spending on information technology is catapulting infrastructure investment from the frying pan into the fire.

"Over budget, over time, over and over again" appears to be an appropriate slogan for large, complex infrastructure projects. This article explains why cost, benefits, and time forecasts for such projects are systematically over-optimistic in the planning phase. The underlying reasons for forecasting errors are grouped into three categories: delusions or honest mistakes; deceptions or strategic manipulation of information or processes; or bad luck. Delusion and deception have each been addressed in the management literature before, but here they are jointly considered for the first time. They are specifically applied to infrastructure problems in a manner that allows both academics and practitioners to understand and implement the suggested corrective procedures. The article provides a framework for analyzing the relative explanatory power of delusion and deception. It also suggests a simplified framework for analyzing the complex principal-agent relationships that are involved in the approval and construction of large infrastructure projects, which can be used to improve forecasts. Finally, the article illustrates reference class forecasting, an outside view de-biasing technique that has proven successful in overcoming both delusion and deception in private and public investment decisions.

Franks, Julian, Mayer, Colin and Rossi, Stefano
(2009)
Ownership: Evolution and Regulation.
The Review of Financial Studies, 22 (10).
pp. 4009-4056.
Link to full text available through this repository.

Abstract

This article is the first study of long-run evolution of investor protection and corporate ownership in the United Kingdom over the twentieth century. Formal investor protection emerged only in the second half of the century. We assess the influence of investor protection on ownership by comparing cross-sections of firms at different times in the century and the evolution of firms incorporating at different stages of the century. Investor protection had little impact on dispersion of ownership: even in the absence of investor protection, rates of dispersion of ownership were high, associated primarily with mergers. Preliminary evidence suggests that ownership dispersion in the United Kingdom relied more on informal relations of trust than on formal investor protection.

Tax systems are generally not designed so much as developed over the years in an incremental way. The review of Australia's future tax system currently under discussion under the chairmanship of Dr Ken Henry (the Henry Review) offers an opportunity to look at the system holistically and to examine fundamentals. Rather than designing a tax system that suits large business and then considering carve outs and concessions for small firms, such a review needs to think about small businesses as part of the initial design of the whole system. The 'think small first principle' that requires policy-makers to take into account the needs of small businesses at an early stage of policy making is now widely accepted. In the Mirrlees Review undertaken by the Institute for Fiscal Studies, small businesses were dealt with in a special study (of which the current author is a co-author), but, as is apparent from some of the key chapters on corporation tax and international issues, it was recognised by those working on corporation tax more generally that there is a need to deal with the structural issues of small business taxation as part of the fundamental design of the system and not simply as an add on or a carve out.

How small businesses should be tackled within tax system design depends very much on the objectives of the design overall. Much of the discussion in the chapter written for the Mirrlees Review and in this paper arises from developments and pressures within Europe. It will be for Dr Henry, his team and those whom they consult to determine the extent to which these pressures and movements are relevant to Australia. Thus, this paper does not presume to make proposals for Australia but is offered as a contribution to the debate.

Many studies assume stock prices follow a random process known as geometric Brownian motion. Although approximately correct, this model fails to explain the frequent occurrence of extreme price movements, such as stock market crashes. Using a large collection of data from three different stock markets, we present evidence that a modification to the random model—adding a slow, but significant, fluctuation to the standard deviation of the process—accurately explains the probability of different-sized price changes, including the relative high frequency of extreme movements. Furthermore, we show that this process is similar across stocks so that their price fluctuations can be characterized by a single curve. Because the behavior of price fluctuations is rooted in the characteristics of volatility, we expect our results to bring increased interest to stochastic volatility models, and especially to those that can produce the properties of volatility reported here.

Europe no longer suffers from Eurosclerosis; unemployment, notably long-term unemployment, had decreased substantially for more than a decade. Mobility across labour market states increased in those countries where unemployment has been falling the most. Institutional reforms -- such as declining employment protection for new entrants in the labour market and less generous unemployment benefits -- account for this increase in mobility. Focusing on these reforms, we rationalize why EU workers, including those with permanent contracts, are increasingly unhappy about labour market conditions in spite of the disappearance of mass unemployment in Europe. Due to these perceptions, policy reversals cannot be ruled out. Governments wishing to minimize the risk of going back to Eurosclerosis should move towards flexicurity configurations, compensating workers for higher risks of job loss, and introduce tenure tracks to the labour market, preventing the development of dual labour market structures. This would avoid dissipating the employment gains of the last decade during this recession.

Despite the lively policy debate on rising household debt, arrears and personal bankruptcy filings, there is elatively little empirical evidence on the determinants of households’ debt repayment behaviour, or on the incidence of arrears. Even less is known about how arrears compare between countries, although debt levels are known to vary widely. Using data from the European Community Household Panel, we first show that arrears are frequently associated with subsequent adverse consequences, such as future unemployment or bad health. Second, we find that arrears are often precipitated by an adverse shock to the household’s income or health, but that there are large differences between countries in how households react tothese events. Finally, we show that these differences can be partly explained by local financial and judicial institutions, as captured by contract enforcement andinformation sharing indicators. In other words, we show that while adverse shocks are highly important, the extent to which they affect repayment behaviour depends crucially on the penalty for defaulting. This finding suggests that although repayment problems often arise from a genuine inability to repay, some households seem to behave strategically.

A culture of candor can bring numerous benefits to any organization. Yet, candor is rare in most organizations. Despite the scarcity of its practice there is a need to develop leaders who value and use candor by demonstrating and practicing candor in the leadership classroom. A description of seven key actions that enable leadership instructors to build a culture of candor in the classroom is provided. Each of these actions is supported with prescriptive guidelines for implementing these practices in the classroom. The influence of the seven actions on the candid behavior of leadership students as well as leadership instructors is also discussed.

Stock prices are known to exhibit non-Gaussian dynamics, and there is much interest in understanding the origin of this behavior. Here, we present a model that explains the shape and scaling of the distribution of intraday stock price fluctuations (called intraday returns) and verify the model using a large database for several stocks traded on the London Stock Exchange. We provide evidence that the return distribution for these stocks is non-Gaussian and similar in shape and that the distribution appears stable over intraday time scales. We explain these results by assuming the volatility of returns is constant intraday but varies over longer periods such that its inverse square follows a gamma distribution. This produces returns that are Student distributed for intraday time scales. The predicted results show excellent agreement with the data for all stocks in our study and over all regions of the return distribution.

We develop a theory of sovereign borrowing where default penalties are not implementable. We show that when debt is held by both domestic and foreign agents, the median voter might have an interest in serving it. Our theory has important practical implications regarding (a) the role of financial intermediaries in sovereign lending, (b) the effect of capital flows on price volatility including the possible overvaluation of debt to the point that the median voter is priced out of the market, and (c) debt restructuring where creditors are highly dispersed.

We examine the interdependency between loan officer compensation contracts and commercial bank internal reporting systems (IRSs). The optimal incentive contract for bank loan officers may require the bank headquarters to commit not to act on certain types of information. The headquarters can achieve this by running a basic reporting system that restricts information flow within the bank. Origination fees for loan officers emerge naturally as part of the optimal contract in our set-up. We examine the likely effect of the new Basel Accord upon IRS choice, loan officer compensation, and bank investment strategies. We argue that the new Accord reduces the value of commitment, and hence that it may reduce the number of projects financed by banks.

This paper investigates energy efficiency policies in the UK with particular reference to the business and public sectors. There are a number of instruments already in place that aim to improve energy efficiency in thesesectors as part of wider UK climate change policy. These instruments have, however, failed to address key barriers to uptake that are specific to large, less-energy-intensive companies and public sector organisations – lightmanufacturing and the “service sector”. In this paper, we tell the story of how policy has evolved to plug this gap between barriers to and policy instruments for energy efficiency.We firstly set the context for energy efficiency in the business and public sectors in terms of existing policy and the potential for carbon abatement. We then examine the barriers to energy efficiency and map these against themain policy instruments. Our analysis clearly illustrates the need for a different approach if the potential for improving energy efficiency is to be realised. We discuss the features of the main proposal for providing this new approach: a consumption-based cap-and-trade scheme. We then traceits path from concept through to policy design to what is now known as the Carbon Reduction Commitment (CRC). We conclude by evaluating the importance of the CRC, due to commence in 2010, in contributing to costeffectiveemissions reduction and security of supply in the UK.

Incentive regulation for networks has been an important part of the reform agenda in a number of countries. As part of this regulatory process, incentives are put in place to improve the cost efficiency of network companies by rewarding good performance relative to a pre-defined benchmark. The techniques used to establish benchmarks are central to the efficiency improvements that are ultimately achieved. Much experience has been gained internationally in the application of benchmarking techniques and we now have a solid understanding of the main indicators of best practice. What we are lacking is a more complete understanding of the factors that influence choice of methods by regulators. In this paper, we present the results of an international survey of energy regulators in 40 countries conducted electronically between June and October 2008. Regulators from European, Australasian and Latin American countries are represented in the survey. Our results show that benchmarking techniques are now widespread in the regulation of gas and electricity networks. Best practice, however, is limited to a small number of regulators. We conclude by summarising existing trends and offering some recommendations on overcoming barriers to best practice efficiency analysis.

Although the use of strategic planning has become widespread in INGDOs they have often been accused of strategic drift — continuous change in their strategic directions with plans only loosely coupled to their activities. However, the way that they prioritize their activities, and the reasons why strategic drift occurs has generally escaped in-depth research. This article draws on detailed, qualitative research of strategic planning meetings at the executive levels in a major INGDO, carried out between July 2006 and December 2007 to identify the reasons why strategic drift occurs and the role of strategic planning. It was found that by deliberately crafting multiple, ambiguous, and ambitious strategies, managers were able to effect organizational change, not by literal strategy implementation, but by using these strategies as metaphors to harness consensus and legitimacy in key stakeholder groups. Senior managers utilize the symbols, language and deliberative arenas of formal strategic planning to effect organizational change; however, strategy, in rational terms, needs to be located in the background for its role to be properly understood. The research unpacks complex decision-making processes in an INGDO and, contrary to normative literature, recommends that, in order to avoid inflationary planning, managers should not take their strategy literally.

Over the last decade, the British government’s attempt to modernise healthcare provision by developing cost efficient and effective services has led to fundamental challenges to established occupational jurisdictions. This has been reflected in the emergence of new occupational roles working in support of professionals. Amongst semi professionals such as nurses these assistant roles might be seen as having contradictory consequences, potentially threatening and helping further the professional project. For semi professionals claims to exclusivity have often been founded upon holistic service provision. As assistants take over from nurses as the principal providers of direct care under the guise of relieving nurses, such claims to holistic care become less credible. Yet the delegation of ‘dangerously routine’ tasks allowing nurses to undertake specialist and technical activities has often been seen as the route to occupational closure and assured professional status. This paper focuses upon occupational jurisdictions between nurses and healthcare assistants in two case study hospitals. Drawing upon data from over 100 interviews with nurses and healthcare assistants and around 150 hours of on ward observation, it explores whether and how job boundaries have shifted and whether this is perceived to have strengthened or weakened nurse professionalisation. The paper contributes to debates by: exploring the dynamic of professionalisation in the context of shifting job boundaries; generating data on the nature of a relatively new occupational role, that of the ‘assistant’; and looking at how public policy shifts can stimulate changes in the division of labour.

The economic growth and industrial development in China over the last decade has been of considerable interest to industry and policy-makers alike, and also been subject of many academic studies. Considerable research on the macro-economic growth and process of industrialisation, as well as the subsequent increase in the domestic demand has been reported. In case of the automotive industry, previous studies have analysed the rather complex industry structure, still dominated by a range of joint ventures between domestic and foreign manufacturers, and specifically commented on the potential and sustainability of domestic demand. In this study we aim to extend the focus by analysing the key features and challenges not only at the manufacturer, but also at the supplier and distribution tiers in the automotive supply chain in China. Reviewing the governmental policies that led the auto industry's development since 1950, we analyse the current capabilities and challenges at the different tiers in the automotive value chain, before concluding with an outlook on the factors impacting on the future development of the automotive industry in China.

Much of the literature on team learning views experience as a unidimensional concept captured by the cumulative production volume of, or the number of projects completed by, a team. Implicit in this approach is the assumption that teams are stable in their membership and internal organization. In practice, however, such stability is rare, because the composition and structure of teams often change over time (e.g., between projects). In this paper, we use detailed data from an Indian software services firm to examine how such changes may affect the accumulation of experience within, and the performance of, teams. We find that the level of team familiarity (i.e., the average number of times that each member has worked with every other member of the team) has a significant positive effect on performance, but we observe that conventional measures of the experience of individual team members (e.g., years at the firm) are not consistently related to performance. We do find, however, that the role experience of individuals in a team (i.e., years in a given role within a team) is associated with better team performance. Our results offer an approach for capturing the experience held by fluid teams and highlight the need to study context-specific measures of experience, including role experience. In addition, our findings provide insight into how the interactions of team members may contribute to the development of broader firm capabilities.

We show that the parent-subsidiary structure of multinational firms created by cross-border mergers and acquisitions is affected by the prospect of international double taxation. Specifically, the likelihood of parent firm location in a country following a cross-border takeover is reduced by high international double taxation of foreign-source income. At the same time, countries with high international double taxation attract smaller numbers of parent firms. A unilateral elimination of worldwide taxation by the United States is simulated to increase the proportion of parent firms locating in the United States following cross-border mergers and acquisitions from 53% to 58%.

J

Private equity’s high degree of leverage in the boom years leading up to the recent bust is a dominant factor in that market’s current precarious state. Valuations have fallen precipitously and are likely to fall farther, with some firms going into default. But many firms will prove robust, and those firms with cash available should be able to find excellent bargains in 2009 and 2010.

Despite the central importance of investors to all initial public offering (IPO) theories, relatively little is known about their role in practice. This article is based on a survey of how institutional investors assess IPOs, what information they provide to the investment banking syndicate, and the factors they believe influence allocations. We find that investor characteristics, in particular brokerage relationships with the bookrunner, are perceived to be the most important factors influencing allocations, which supports the view that IPO allocations are part of implicit quid pro quo deals with investment banks. The survey raises doubts as to the extent of information production or revelation.

Special purpose acquisition companies (SPACs) have raised around $22bn from investors since 2003, and comprised 20% of total funds raised in US IPOs in 2007. SPACs are interesting structures - allowing investors a risk-free option to invest in a future acquisition. However, we show that more than one-half of approved deals immediately destroy value. Investors, who can observe the market's view of the proposed deal, as well as that of the founders, should listen to the market, since the extreme incentives faced by the SPAC founders create corresponding conflicts of interest. We propose a simple, observable rule - based on market prices - which investors should heed.

Tax savings associated with increased levels of debt are often thought to be an important source of returns for private equity funds conducting leveraged buyouts (LBOs). However, as leverage is available to all bidders, the vendors may appropriate any benefits in the form of the takeover premium. For the 100 largest U.S. public-to-private LBOs since 2003, we estimate the size of the additional tax benefits available to private equity purchasers. We find a strong cross-sectional relationship between tax savings and the size of takeover premia; and on average the latter are around twice the size of the former. Consequently, the tax savings from increasing financial leverage essentially accrue to the previous shareholders rather than the private equity fund that conducts the LBO. It is, therefore, unlikely that (ex ante predictable) tax savings are an important source of returns for private equity funds. Furthermore, policy proposals that aim to restrict leverage or the tax-deductibility of debt are likely to have their impact mainly on existing owners of companies.

Quantifying human group dynamics represents a unique challenge. Unlike animals and other biological systems, humans form groups in both real (offline) and virtual (online) spaces—from potentially dangerous street gangs populated mostly by disaffected male youths to the massive global guilds in online role-playing games for which membership currently exceeds tens of millions of people from all possible backgrounds, age groups, and genders. We have compiled and analyzed data for these two seemingly unrelated offline and online human activities and have uncovered an unexpected quantitative link between them. Although their overall dynamics differ visibly, we find that a common team-based model can accurately reproduce the quantitative features of each simply by adjusting the average tolerance level and attribute range for each population. By contrast, we find no evidence to support a version of the model based on like-seeking-like (i.e., kinship or “homophily”).

Jones, Howard and Jenkinson, Tim
(2009)
Competitive IPOs.
European Financial Management, 15 (4).
pp. 733-756.
Link to full text available through this repository.

Abstract

Competition between investment banks for lead underwriter mandates in IPOs is fierce, but having committed to a particular bank, the power of the issuer is greatly reduced. Although information revelation theories justify giving the underwriters influence over pricing and allocation, this creates the potential for conflicts of interest. In this clinical paper we analyse an interesting innovation that has been used in recent European IPOs whereby issuers separate the preparation and distribution roles of investment banks, and keep competitive pressure on the banks throughout the issue process. These ‘competitive IPOs’ allow the issuer greater control and facilitate more contingent fee structures that help to mitigate against ‘bait and switch.’ But unlike more radical departures from traditional bookbuilding – such as auctions – the competitive IPO is an incremental market-based response to potential conflicts of interest that retains many of the advantages of investment banks’ active involvement in issues.

Five experts gathered recently to discuss the future of enterprise risk management: Kaplan, the Baker Foundation Professor at Harvard Business School, who with his colleague David Norton developed the balanced scorecard; Mikes, an assistant professor at HBS who studies the evolution of risk management and the role of the chief risk officer; Simons, the Charles M. Williams Professor of Business Administration at HBS; Tufano, the Sylvan C. Coleman Professor of Financial Management at HBS; and Hofmann, the chief risk officer at Koch Industries. The panel was moderated by HBR senior editor David Champion. Among the questions they addressed were: How predictable was the financial meltdown of 2008-2009? Did new tools for assessing risk give a false sense of security? How do the challenges facing industrial companies differ from those facing the financial sector? Is outsourcing an effective risk-management tool? Have capital structures become a bit too efficient in many companies? What makes a good chief risk officer?

Kar, Malobi
(2009)
Product and Service Innovation.
In: Reynolds, Jonathan, (ed.)
E-Business: A Management Perspective.
Oxford University Press.
ISBN 978-0199216482
Full text not available from this repository.

Harbour City is the largest shopping mall in Hong Kong with an area of two million square feet. It is one of the main tourist attractions in Tsim Sha Tsui. The shopping mall houses over 700 shops of all types, has more than 50 food and beverage outlets, hotels and cinemas. It provides tourists from all over the world, as well as locals, with a one-stop shopping and entertainment experience. The majestic view of the harbour, the endless shopping opportunities and worldwide cuisine make this a real 'must see' attraction in Hong Kong. Harbour City achieved total sales of HKD13.4 billion in 2008, and HKD10.4 billions in the first three quarters of 2009.

Corporate patents are perceived to be the key profit-drivers in many multinational enterprises (MNEs). Moreover, as the transfer pricing process for royalty payments is often highly intransparent, they also constitute a major source of profit shifting opportunities between multinational entities. For both reasons, MNEs have an incentive to locate their patents at affiliates with a relatively small corporate tax rate. Our paper empirically tests for this relationship by exploiting a unique dataset which links information on patent applications to micro panel data for European MNEs. Our results suggest that the corporate tax rate (differential to other group members) indeed exerts a negative effect on the number of patents filed by a subsidiary. The effect is quantitatively large and robust against controlling for affiliate size. The findings prevail if we additionally account for royalty withholding taxes. Moreover, binding `Controlled Foreign Company' rules tend to decrease the number of patent applications.

Kendall, Tim, McGoey, Linsey and Jackson, Emily
(2009)
If NICE was in the USA.
The Lancet, 374 (9686).
pp. 272-273.
Link to full text available through this repository.

Abstract

Decisions about drugs by doctors, patients, and the public depend on a complex framework of industry regulation, professional and public guidance, and transparent publication of the research on which the regulatory framework depends. In the UK, there are two agencies with a national role in this decision-making process. First, a regulator, the Medicines and Healthcare products Regulatory Agency (MHRA), which is akin to the Food and Drug Administration (FDA) in the USA and has statutory responsib ...

Khorana, Ajay, Servaes, Henri and Tufano, Peter
(2009)
Mutual Fund Fees Around the World.
The Review of Financial Studies, 22 (3).
pp. 1279-1310.
Link to full text available through this repository.

Abstract

Using a new database, we study fees charged by 46,580 mutual fund classes offered for sale in 18 countries, which account for about 86 of the world fund industry in 2002. We examine management fees, total expense ratios, and total shareholder costs (including load charges). Fees vary substantially across funds and from country to country. To explain these differences, we consider fund, sponsor, and national characteristics. Fees differ by investment objectives: larger funds and fund complexes charge lower fees; fees are higher for funds distributed in more countries and funds domiciled in certain offshore locations (especially when selling into countries levying higher taxes). Substantial cross-country differences persist even after controlling for these variables. These remaining differences can be explained by a variety of factors, the most robust of which is that fund fees are lower in countries with stronger investor protection.

King, Brayden, Felin, Teppo and Whetten, David
(2009)
Comparative Organizational Analysis: An Introdction.
In: Lounsbury, Michael, (ed.)
Studying Differences between Organizations: Comparative Approaches to Organizational Research.
Research in the Sociology of Organizations, 26
(26).
Emerald Group Publishing Limited, pp. 3-19.
ISBN 978-1-84855-646-1
Link to full text available through this repository.

Abstract

Comparative organizational analysis once dominated American organizational sociology, grounded in rich case studies about organizational processes and outcomes. The Columbia school's approach to organizational research was exemplary in this regard. Following the publication of Robert K. Merton's (1940) essay, “Bureaucratic Structure and Personality,” he attracted a group of talented doctoral students to his formal organizations seminar (Crothers, 1990), the core of whom would go on to write dissertations, books, and articles forming the substance of American organizational sociology in the decades to come. Among those students were Philip Selznick, Alvin Gouldner, Peter Blau, Seymour Martin Lipset, Rose Coser, and James Coleman. While their work varied greatly in substantive content, their studies shared a theoretical interest in explaining intra-organizational dynamics and the unexpected outcomes of bureaucratic administration. Organizations, they demonstrated, developed “lives of their own,” quite outside the intents of their founders (Haveman, 2009; refer, especially, Selznick, 1957). Organizations, in other words, were adaptive to the needs of their constituents, but adaptations did not always produce the intended results. One of the unintended consequences of organizational development was increasing variety in the kinds of organizations that emerged to meet particular societal goals or ends. Thus, an inherent focus of this early comparative research was the explanation of variety in organizational types, policies, and outcomes and an emphasis on the ways in which organizations diverged from ideal types.

This paper assesses the agglomeration pattern of four-digit industries in Germany using a rich data set on the population of German firms. To identify geographical agglomeration, we follow the distance based approach of Duranton and Overman (2005) and find that the location pattern of 78% of our industries departs from randomness in the sense that firms exhibit significant geographical localization. In line with previous studies on manufacturing firms in the UK and France, our analysis suggests that especially traditional manufacturing industries exhibit strong localization patterns. Moreover, we find that geographical localization is not restricted to the manufacturing sector but that it plays an equally, or even more important role in service industries.

Kumpula, J.M., Onnela, Jukka-Pekka, Saramäki, Jari, Kertész, Janos and Kaski, Kimmo
(2009)
Model of community emergence in weighted social networks.
Computer Physics Communications, 180 (4).
p. 517.
(Cited 3 times in Web of Science.)
Link to full text available through this repository.

Abstract

Over the years network theory has proven to be rapidly expanding methodology to investigate various complex systems and it has turned out to give quite unparalleled insight to their structure, function, and response through data analysis, modeling, and simulation. For social systems in particular the network approach has empirically revealed a modular structure due to interplay between the network topology and link weights between network nodes or individuals. This inspired us to develop a simple network model that could catch some salient features of mesoscopic community and macroscopic topology formation during network evolution. Our model is based on two fundamental mechanisms of network sociology for individuals to find new friends, namely cyclic closure and focal closure, which are mimicked by local search-link-reinforcement and random global attachment mechanisms, respectively. In addition we included to the model a node deletion mechanism by removing all its links simultaneously, which corresponds for an individual to depart from the network. Here we describe in detail the implementation of our model algorithm, which was found to be computationally efficient and produce many empirically observed features of large-scale social networks. Thus this model opens a new perspective for studying such collective social phenomena as spreading, structure formation, and evolutionary processes.

This paper reports a grounded empirical study into the role of failure recognition in project-based work. The findings show that project managers considered a set of performance measures beyond those of time, cost and quality. Further, they focused on finding elements of success and did not recognise elements of failure in their projects as opportunities for improvement. The implications of these findings are that if a failure is to be a learning point for future success, there needs to be development of an extended set of performance measures including 'failure measures' for projects. ].

The purpose of this paper is to examine the effectiveness of qualitative project risk management processes as used in IS/IT projects. Risk management is widely identified as one of the key processes within project management, and previous empirical evidence, combined with high levels of project failure, has questioned whether the prevailing approaches to managing project risks are indeed effective. The research problem of investigating the extent to which project managers over- and underestimate risks and the causes for misestimating risks was empirically investigated in the context of IT/IS projects within organisations such as computer service providers (CSPs). The results from studying IS/IT projects show that managers consistently both over- and underestimate risk and that even when a risk is identified, there are behavioural modifiers that intervene in the effective management of these risks.

We study the statistical properties of SIR epidemics in random networks, when an epidemic is defined as only those SIR propagations that reach or exceed a minimum size sc. Using percolation theory to calculate the average fractional size View the MathML source of an epidemic, we find that the strength of the spanning link percolation cluster P∞ is an upper bound to View the MathML source. For small values of sc, P∞ is no longer a good approximation, and the average fractional size has to be computed directly. We find that the choice of sc is generally (but not always) guided by the network structure and the value of T of the disease in question. If the goal is to always obtain P∞ as the average epidemic size, one should choose sc to be the typical size of the largest percolation cluster at the critical percolation threshold for the transmissibility. We also study Q, the probability that an SIR propagation reaches the epidemic mass sc, and find that it is well characterized by percolation theory. We apply our results to real networks (DIMES and Tracerouter) to measure the consequences of the choice sc on predictions of average outcome sizes of computer failure epidemics.

Firms may seek to collaborate with skilled suppliers not only to access existing technologies but also to jointly develop new concepts. We sought to examine the details of collaborative concept development through matched cases of novel convertible roof projects in the European automotive industry. The result is a three phase model marked by the use of supplier concept competitions to probe possible features and by the selective maintenance of distance to suppliers. Knowledge transfer and integration practices, differences depending on initial experience, and implications for managing such distributed systems of innovation are highlighted.

The 'institutional' approach to organizational research has shown how enduring features of social life - such as marriage and bureaucracy - act as mechanisms of social control. Such approaches have traditionally focused attention on the relationships between organizations and the fields in which they operate, providing strong accounts of the processes through which institutions govern action. In contrast, the study of institutional work reorients these traditional concerns, shifting the focus to understanding how action affects institutions. This book sets a research agenda within the field of institutional work by analyzing the ways in which individuals, groups, and organizations work to create, maintain, and disrupt the institutions that structure their lives. Through a series of essays and case studies, it explores the conceptual core of institutional work, identifies institutional work strategies, provides exemplars for future empirical research, and embeds the concept within broader sociological debates and ideas.

The 'institutional' approach to organizational research has shown how enduring features of social life - such as marriage and bureaucracy - act as mechanisms of social control. Such approaches have traditionally focused attention on the relationships between organizations and the fields in which they operate, providing strong accounts of the processes through which institutions govern action. In contrast, the study of institutional work reorients these traditional concerns, shifting the focus to understanding how action affects institutions. This book sets a research agenda within the field of institutional work by analyzing the ways in which individuals, groups, and organizations work to create, maintain, and disrupt the institutions that structure their lives. Through a series of essays and case studies, it explores the conceptual core of institutional work, identifies institutional work strategies, provides exemplars for future empirical research, and embeds the concept within broader sociological debates and ideas.

Leicht, Elizabeth
(2009)
Percolation on Interacting Networks.
In: International Workshop and Conference on Network Science (NetSci), 29 June - 3 July, 2009, Venice, Italy.
Full text not available from this repository.

Purpose – The purpose of this paper is to investigate the role of organizational learning capability in relation to leadership tasks performed by executives and organizational performance by bridging the concepts of organizational learning and NSD.

Design/methodology/approach – The NSD processes of seven telecom service providers in Thailand are adopted as the research context. Conceptual framework is developed based on literatures and expert interviews. Multi-item questionnaires are designed mostly based on interviews with 12 experts involving in NSD processes of those seven providers. Survey is conducted with 497 executives and employees in NSD processes of those providers. The structural equation modeling and LISREL 8.72 application are employed in data analyses.

Findings – Leadership tasks performed by NSD executives significantly affect the development of organizational learning capability, which in turn significantly affects organizational performance. The effectiveness of executives' leadership tasks and organizational learning capability development are symbiotic.

Research limitations/implications – The validation and generalization of the results are still limited to the context of NSD processes of telecom service providers in Thailand. The analyses based on second-order factors and perceptual data.

Practical implications – In today's context, NSD process should be managed as the dynamic learning process. The integration of executives plays a key role in facilitating the development of organizational learning capability in such a process.

Originality/value – The integrative framework of collective and collaborative leadership tasks, organizational learning capability, and organizational performance are tested empirically and discussed based on real practices. The complementary role of organizational learning capability is introduced.

Site-specific probability density rainfall forecasts are needed to price insurance premiums, contracts, and other financial products based on precipitation. The spatiotemporal correlations in U.K. daily rainfall amounts over the Thames Valley are investigated and statistical Markov chain generalized linear models (Markov GLM) of rainfall are constructed. The authors compare point and density forecasts of total rainfall amounts, and forecasts of probability of occurrence of rain from these models and from other proposed density models, including persistence, statistical climatology, Markov chain, unconditional gamma and exponential mixture models, and density forecasts from GLM regression postprocessed NCEP numerical ensembles, at up to 45-day forecast horizons. The Markov GLMs and GLM processed ensembles produced skillful 1-day-ahead and short-term point forecasts. Diagnostic checks show all models are well calibrated, but GLMs perform best under the continuous-ranked probability score. For lead times of greater than 1 day, no models were better than the GLM processed ensembles at forecasting occurrence probability. Of all models, the ensembles are best able to account for the serial correlations in rainfall amounts. In conclusion, GLMs for future site-specific density forecasting are recommended. Investigations explain this conclusion in terms of the interaction between the autocorrelation properties of the data and the structure of the models tested.

In this paper, we propose a spreading activation approach for collaborative filtering (SACF). By using the opinion spreading process, the similarity between any users can beobtained. The algorithm has remarkably higher accuracy than the standard collaborative filtering using the Pearson correlation. Furthermore, we introduce a free parameter β to regulate the contributions of objects to user–user correlations. The numerical results indicate that decreasing the influence of popular objects can further improve the algorithmic accuracy and personality. We argue that a better algorithm should simultaneously require less computation and generate higher accuracy. Accordingly, we further propose an algorithm involving only the top-N similar neighbors for each target user, which has both less computational complexity and higher algorithmic accuracy.

Tax competition theory predicts that the introduction of the EU Single Market in 1993 should have caused excise tax competition and thus increased strategic interaction in the setting of excise taxes among EU countries. We test this prediction using a panel data set of 12 EU countries over the period 1987–2004. We find that for excise duties on still and sparkling wine, beer and ethyl alcohol, strategic interaction significantly increased after 1993. There is weaker evidence of increased interaction in cigarette taxes, possibly because cigarettes are widely smuggled, giving rise to tax competition even before the Single Market.

Although the international taxation system is not new to problems and crises, economic liberalization and the increasing integration of world markets has intensified its difficulties, with MNEs being at the forefront of tax avoidance by taking advantage of loosely co-ordinated international tax treaties. The threat is worrisome enough for emerging economies such as India and China to take notice, despite their earlier stance of regarding foreign investment as a boom, regardless of tax contributions. This article takes a specific example in the case of the Vodafone Essar tax dispute regarding the payment of capital gains tax on the transfer of a controlling interest in an Indian entity from one foreign company to another, in order to illustrate the loopholes in Indian tax law, the choice that is present before Indian courts - a choice between abiding by the principles of international taxation or changing Indian tax policy altogether, and a view on the way international taxation agreements are to be read in light of the norms of international taxation.

Firms' tax planning decisions, similar to their other operational decisions, are made in a competitive environment. Various stakeholders observe the tax payments and evaluate these against the relevant peer group, which creates interdependencies in the tax planning activities of firms. Introducing the concept of reputational loss we show the positive interdependence in a theoretical model and test it in a spatial econometric model. Empirical evidence suggests that benchmarking takes place both within countries and within industries, however for the latter it is important to include firms in large non-EU OECD countries. Further, the analysis shows that spatial interdependence is stronger for the largest firms and if they have an average effective tax rate above the statutory tax rate

We analyze a national sample of Americans with respect to their debt literacy, financial experiences, and their judgments about the extent of their indebtedness. Debt literacy is measured by questions testing knowledge of fundamental concepts related to debt and by self-assessed financial knowledge. Financial experiences are the participants' reported experiences with traditional borrowing, alternative borrowing, and investing activities. Overindebtedness is a self-reported measure. Overall, we find that debt literacy is low: only about one-third of the population seems to comprehend interest compounding or the workings of credit cards. Even after controlling for demographics, we find a strong relationship between debt literacy and both financial experiences and debt loads. Specifically, individuals with lower levels of debt literacy tend to transact in high-cost manners, incurring higher fees and using high-cost borrowing. In applying our results to credit cards, we estimate that as much as one-third of the charges and fees paid by less knowledgeable individuals can be attributed to ignorance. The less knowledgeable also report that their debt loads are excessive or that they are unable to judge their debt position.

The article reports on a study of U.S. consumers which found that the majority of respondents did not understand the concepts relating to compound interest, credit card fees, and debt. The study on debt literacy was conducted by the authors and the marketing research company TNS. The authors suggest that a component could be added to employee assistance programs that would educate them about financial choices. Statistics show the demographics of the debt literacy test which included a question about compounded annual interest rates.

M

This paper investigates the effect of tax haven operations on the tax liabilities of corporate groups headquartered in 15 OECD countries. Using consolidated accounting data from ORBIS (2003{2007), this work finds that, at the mean, an additional tax haven subsidiary reduces tax liabilities over total assets by 7.4 per cent in the long run. At the mean, the marginal effective tax rate (ETR) of a corporate group with tax haven subsidiaries is one percentage point lower than it is for groups without low-tax offshore operations. The results also show that the marginal ETR of companies headquartered in countries with a territorial system is lower than that of companies head- quartered in jurisdictions with a worldwide system of taxation on corporate profits. More specifically, corporate groups headquartered in the United States have the highest marginal ETR.

This paper examines the differences in total factor productivity (TFP) between multinationals and domestic firms before and after tax rate changes to investigate whether the host country corporate tax rate has a significant influence on the measured TFP advantage of multinational companies. Using a sample of approximately 16,000 European firms (1998-2004), we find that a 10 percentage points cut in the statutory corporate tax rate would increase multinationals' measured TFP by about 10 per cent relative to domestic firms, consistent with profit-shifting by multinationals. At the sample mean, this would imply a 44 per cent increase in the TFP advantage of multinationals.

Maitlis, Sally
(2009)
Who am I now? Sensemaking and identity in posttraumatic growth.
In: Roberts, Laura Morgan and Dutton, Jane E., (eds.)
Exploring Positive Identities and Organizations: Building a Theoretical and Research Foundation.
Psychology Press, New York, pp. 47-76.
ISBN 978-1841697642
Full text not available from this repository.

Service and manufacturing firms often attempt to mitigate demand-supply mismatch risks by deploying flexible resources that can be adapted to serve multiple demand classes. It is critical to evaluate the trade-off between the cost of investing in such resources and the resulting benefits. In this paper, we show that the heavily advocated “chaining” heuristic can sometimes perform unsatisfactorily when resources are not perfectly flexible. Alternatively, we propose an integer stochastic programming formulation as an attempt to optimize the flexibility structure. Although it is intractable to compute the optimal solution exactly, we propose a Lagrangian-relaxation heuristic that generates high-quality solutions efficiently. Using computational experiments, we identify conditions under which our approach can outperform the popular chaining solution.

We study the problem of designing a two-echelon spare parts inventory system consisting of a central plant and a number of service centers each serving a set of customers with stochastic demand. Processing and storage capacities at both levels of facilities are limited. The manufacturing process is modeled as a queuing system at the plant. The goal is to optimize the base-stock levels at both echelons, the location of service centers, and the allocation of customers to centers simultaneously, subject to service constraints. A mixed integer nonlinear programming model (MINLP) is formulated to minimize the total expected cost of the system. The problem is NP-hard and a Lagrangian heuristic is proposed. We present computational results and discuss the trade-off between cost and service.

This report is based on a research project funded by the GMC/ESRC Public Services Programme entitled „The Visible and Invisible Performance Effects of Transparency in Professional regulation‟. The research compared the effects of regulation for doctors with developing regulation for psychotherapists and counsellors (as outlined in the 2007 White Paper „Trust, Assurance and Safety: The regulation of health professionals‟). We summarise here some of the key findings in our study focusing on issues that are relevant to the HPC consultation on the regulation of counsellors and psychotherapists.

We conducted 50 formal interviews and 22 informal scoping interviews with regulators and other officials, representatives of professional bodies, patient representatives, doctors (GPs and psychiatrists), psychotherapists and counsellors. In addition we observed Health Professionals Council (HPC) Professional Liaison Group (PLG) Meetings for Psychotherapists and Counsellors, as well as for Psychologists. We also observed four professional conferences on the regulation of counselling and psychotherapy. Finally we conducted a stakeholder workshop where we presented our provisional findings to a group including those involved in regulating psychotherapy and counselling at the national level and practising psychotherapists and counsellors, to validate our results.

We present our findings as follows. First we examine the way that doctors (GPs and psychiatrists) said that current forms of regulation affected their practice. Although their practice and context differ from those of psychotherapists and counsellors, their experience highlights a number of issues and questions about professional regulation, which we believe should be considered in the future regulation of psychotherapists and counsellors. Second, we examine the experiences of psychotherapists and counsellors working in the NHS, voluntary and independent sectors. In particular, we focus on a large, integrated NHS mental health service, whose work is influenced by the local development of an Improving Access to Psychological Therapies (IAPT) service.Again, although these experiences do not reflect the wider contexts of psychotherapists and counsellors per se, they do shed light on the effects of a more regulated mental health context. Third, we briefly highlight what we regard to be an emerging assemblage of regulatory processes in the field of psychotherapy and counselling. Whilst the question of regulation is ostensibly restricted to the present focus of the HPC PLG, we draw attention to what we believe are important wider forces shaping this process. Finally, we draw conclusions and make some recommendations designed to inform the development of future regulation.

Our research is a relatively small scoping study based upon a limited number of interviews and observation. We do not claim that the findings outlined in this report are representative of the whole field of psychotherapy and counselling. However our research does reflect how regulation is perceived in different contexts, it may indicate how future regulation would be interpreted and implemented in practice, and suggest some of its potential visible and invisible effects.

Recent controversies over the safety of drugs such as Vioxx, a painkiller manufactured by Merck, and Seroxat, an SSRI antidepressant manufactured by GlaxoSmithKline, have led to a consequence that at first seems entirely positive: they have attracted more attention to the suppression of negative clinical trial data by industry and academic researchers, helping to establish clinical trial registries where randomized controlled trials (RCTs) must be registered at their outset.In this paper, through a focus on debates over the safety of selective serotonin reuptake inhibitor (SSRI) antidepressants such as Seroxat, I examine recent efforts to provide more public access to clinical trial data, documenting how, despite declarations of their commitments to openness, pharmaceutical companies have found ways to evade the need to publicly disclose trials. Secondly, I suggest the emphasis on securing more access has fostered the adverse effect of deflecting attention from methodological limitations within studies that are widely available. Drawing analogies to work by Bourdieu, I argue that a paradoxical consequence of the demand for more access is the tendency to solidify faith in the moral authority of RCTs, something that inadvertently strengthens the authority of those, such as regulators and industry groups, which withheld RCT data to begin with.I suggest it is the very limitations of RCTs – their inadequacies in producing reliable evidence of clinical effects – that help to strengthen popular and scientific assumptions of their superiority as methodological tools. This point sheds light on the question of why systems widely recognized to be ineffective often assume greater authority at the very moment when people speak of their dysfunction.

In September 2004, the global pharmaceutical manufacturer Merck & Co. removed Vioxx from the US market. The company soon faced almost 30,000 lawsuits over the alleged concealment of adverse effects. Despite suspicions that the Vioxx scandal would cripple the company's profitability, Merck's shares more than doubled between 2005 and 2007. Drawing on this case, I describe how scientific uncertainty surrounding the effects of Vioxx has been legally useful for Merck executives in exonerating their culpability for failing to disclose the adverse effects of the drugs. Extrapolating from this, I suggest uncertainty is generative and performative: it creates a demand for resolutions to the ambiguity it perpetuates, often strengthening the authority of those who have advanced a position of uncertainty to begin with. Finally, I argue paying more attention to the value of 'capitalized uncertainty' helps to nuance earlier work on the manufacture of risk and uncertainty.

Philanthrocapitalism – the harnessing of pro-market strategies in order to increase returns on philanthropic investment – is starting to polarize opinions in the worlds of philanthropy, global health and development. With the term coined in just 2006, “philanthrocapitalism” has yet to attract significant attention among social scientists. In this paper, drawing on interviews with policy experts at places such as WHO, the World Economic Forum, and Médicins san Frontières, I examine the emergence of philanthrocapitalism, comparing it to parallel trends aimed at alleviating poverty in developing regions, such as the promotion of social investment and the rise of social entrepreneurship. I then explore the influence of these related, but distinct, phenomena on the politics of global health governance, with a particular focus on concerns with the growing dominance of the Gates Foundation on agenda-setting and advocacy efforts. Finally, I draw parallels between the new philanthropy and more traditional forms of charitable investment practiced during the 20th-century. Theorists such as Bourdieu, building on Mauss’ work, have long suggested there is no such thing as a free gift: all gifts are offered with either the assumption of eventual reciprocity, or with an eye to generating greater social prestige. This insight parallels criticisms from scholars who, pointing to Gramsci’s conception of hegemony as “intellectual and moral leadership,” argue that philanthropic projects aimed at improving social conditions or providing educational opportunities are rooted in ensuring the viability of US and European economic and foreign policy interests. I suggest the growth of philanthrocapitalism raises novel concerns, which both legitimate and surpass questions posed by earlier scholars such as Gramsci, Mauss and Bourdieu of older forms of philanthropy.

As a result of the growth of evidence-based practices across the world, health-care providers and policymakers in the United States, United Kingdom, and Europe have established institutes such as the United Kingdom’s National Institute for Health and Clinical Excellence (NICE) to produce clinical guidelines that physicians are asked to use in their daily practice. This article discusses how the withholding of clinical trial information by pharmaceutical companies and academic researchers affects the reliability of clinical guidelines. It first offers a case study analysis of the U.K. drug regulator’s failure to prosecute GlaxoSmithKline, manufacturer of the bestselling antidepressant Seroxat (manufactured as Paxil in North America), for withholding information on the safety of Seroxat from regulators. It next examines the idea of a “Sarbanes- Oxley for Science,” a recent proposal that seeks to introduce legislation forcing companies to disclose clinical trials that have indeterminate or negative results. Legislation such as Sarbanes-Oxley for Science would solve some problems with the withholding of data, but not all. Until practitioners and policymakers address the political and legal barriers preventing full access to clinical trial data for all medical treatments, the ideals of evidence-based practice will remain elusive.

From the subprime crisis, to the war on terror; from the politics of climate change to the rise of ‘evidence’ based medicine, this workshop will examine whether it is ignorance, and not knowledge, that serves as the main bulwark of economic, political and financial strength. In the context of global crises, whether financial, military or pandemic, is the ‘unknown’ increasingly being exploited as a strategic tool for personal and organisational survival?

Rising food prices threatened an unprecedented number of people around the world with malnutrition or starvation in 2008. The new Executive Director of the United Nations' World Food Programme (WFP)--the world's largest food relief agency-- must not only address this challenge but also must rethink the WFP's strategy in the rapidly-changing world of humanitarian assistance.

We empirically study the market impact of trading orders. We are specifically interested in large trading orders that are executed incrementally, which we call hidden orders. These are statistically reconstructed based on information about market member codes using data from the Spanish Stock Market and the London Stock Exchange. We find that market impact is strongly concave, approximately increasing as the square root of order size. Furthermore, as a given order is executed, the impact grows in time according to a power law; after the order is finished, it reverts to a level of about 0.5–0.7 of its value at its peak. We observe that hidden orders are executed at a rate that more or less matches trading in the overall market, except for small deviations at the beginning and end of the order.

Global firms often struggle to replicate practices among their culturally and geographically dispersed subsidiaries. Part of the reason for this is that certain practices, including human resource management (HRM) practices, are complex and context specific. In this study, we develop a framework to help identify how firms might overcome challenges of practice replication through alignment of information systems, application processes, and people. We find that managerial alignment of formal processes and systems, along with informal alignment of people (shared objectives), improve the capability of a multinational corporation (MNC) to replicate human resource practices across subsidiaries. We also discuss managerial implications.

Research on professional service firms emphasizes similarities in their organization and management and distinctiveness from other types of organization. In this paper we take a different tack and focus on the differences between professional service firms, that is, on heterogeneity across different professional sectors. We argue that differences between professions on a number of dimensions affect the nature of professionals' work and, in turn, the organization and management of firms across different professional sectors. Drawing on the sociology of professions literature we focus on three key dimensions of knowledge, jurisdictional control and client relationships to compare legal, auditing and engineering consulting firms. We consider how differences in these dimensions across the three professional services sectors impact upon the way firms are organized. We offer a number of propositions explicating how differences in the nature of knowledge, jurisdictional control and client relationships have implications for organizational form, team-working and pricing systems.

We analyze the desirability of level playing fields in international financial regulation. In general, level playing fields impose the standards of the weakest regulator upon the best-regulated economies. However, they may be desirable when capital is mobile because they counter a cherry-picking effect that lowers the size and efficiency of banks in weaker economies. Hence, while a laissez faire policy favors the better-regulated economy, level playing fields are good for weaker regulators. We show that multinational banking mitigates the cherry-picking effect, and reduces the damage that a level playing field causes in the better-regulated economy.

Objective: To evaluate patient safety in an emergency surgical unit using process and outcome measures in parallel. Background: Patient harm from errors in care is common in modern surgical practice. Measurement of the problem is essential to any solution, but current methods of evaluating patient harm are either impractical or inadequate. We have therefore analyzed compliance with safety-relevant care processes, with the aim of developing a process-based system for evaluating ward safety. Methods: Adverse events (AE), potential adverse events (PAE), and 7 safety-relevant processes were measured on a 38-bed surgical emergency unit over a 16-week period. AE, PAE, and process measures were studied by prospective direct observation in large convenience samples, using objective measures. Possible influences on AE and PAE risk were analyzed. Results: Compliance with the 7 processes studied ranged from 23% to 89%. The AE and PAE rates were 11.9% and 13.8% in a 63% sample of admissions (n = 607). Length of stay was significantly associated with both AE (P < 0.001) and PAE (P < 0.001). Having an operation was also associated with AE (P = 0.001) but not with PAE. No other factors appeared to influence AE/PAE rates. Delays were the commonest causes of both AE and PAE. Conclusions: Compliance with individual care processes on a ward with average levels of patient harm is poor. Length of hospital stay increases the risk of both AE and PAE, suggesting a system defect. A bundle of care processes may be useful for monitoring safety improvement.

This paper presents an exploratory analysis of the emergent reporting practices used by social entrepreneurs in terms of their institutional settings and strategic objectives. These reporting practices not only account for financial performance but also disclose more nuanced and contingent social and environmental impacts and outcomes. Furthermore, they act as symbolic objects expressing the market orientation of many socially entrepreneurial organizations in that they aim to provide more complete and transparent disclosure of a variety of performance impacts. Conceptually, this paper draws upon approaches developed within the sociology of accounting as institutional practice and uses three theoretical interpretations to conceptualize the function and effects of reporting, disclosure, and audit in social entrepreneurship: positivist; critical theorist; and interpretative. A discussion of five case studies leads to the development of a new theoretical construct - 'Blended Value Accounting' - that constitutes a spectrum of disclosure logics used by social entrepreneurs to access resources and realize organizational mission objectives with key stakeholders. Conclusions consider some further questions around socially entrepreneurial reporting practices and strategies and suggest some new lines of research going forward.

Short-term financial claims held by uninformed outside investors impose a tax on insider opportunism by diluting the ownership stake of opportunistic owner-managers. By thus limiting managerial opportunism, short-term financing increases firm value and social welfare. When given a choice, owner-managers will prefer socially beneficial short-term external financing over internal financing. We show that these results are equilibrium outcomes of a model where firms can act opportunistically in product markets. Moreover, we document the same beneficial effect of short-term external finance in a laboratory experiment implementing this game.

We model long-run firm performance, management compensation, and corporate governance in a dynamic, nonstationary world. We show that managerial compensation and governance policies, which, in a single-period context, can best be rationalized by self-serving managerial influence over board policy, are shareholder-wealth maximizing in a dynamic setting. For example, shareholder wealth is maximized by governance policies that tie board deference to generous compensation and link the level of current compensation more to luck than performance. Further, under shareholder-wealth maximizing polices, managerial diversion of firm resources for private consumption is likely to accompany stock price declines which immediately follow sustained price increases and lax board oversight. Unless the the likelihood of a control transfer is large, stock-based managerial compensation may not produce as much shareholder value as simple salary contracts.

This paper considers optimal compensation for a CEO who is entrusted with administering corporate assets honestly. Optimal compensation designs maximize integrity at minimum cost. These designs are very “low powered,” i.e., while specifying a lower bound for performance and increasing pay with performance, they increase compensation at a rapidly decreasing rate. Thus, integrity considerations engender optimal compensation packages that closely resemble the very pervasive 80/120 bonus plans, exactly the sort of compensation that Jensen (2003) argues should compromise integrity. Under optimal designs, expected compensation increases linearly with firm size, and increases in the market/book ratio. Moreover, given optimal compensation, CEO asset diversion is limited to high market-to-book firms that have received negative productivity shocks.

Ann Smart Martin examines two counties in backcountry Virginia, part of the “shifting edge” of the British Empire in the eighteenth century. She asks how and why the residents of those counties bought into the world of consumer goods. In answering the how, Martin builds on works by Jacob Price, Carole Shammas, and others who have shown that by the late eighteenth century, the manufacture and distribution of goods in the Atlantic world had become sophisticated and competitive. To answer the more difficult question—why did particular individuals buy, make, and use particular goods?—Martin relies on the techniques of material culture studies, which she herself has done much to advance. But—and this is no reflection on her skills—she is only partially successful at delivering answers.

Complex-systems research is becomingly increasingly data-driven, particularly in the social and biological domains. Many of the systems from which sample data are collected feature structural heterogeneity at the mesoscopic scale (i.e. communities) and limited inter-community diffusion. Here we show that the interplay between these two features can yield a significant bias in the global characteristics inferred from the data. We present a general framework to quantify this bias, and derive an explicit corrective factor for a wide class of systems. Applying our analysis to a recent high-profile survey of conflict mortality in Iraq suggests a significant overestimate of deaths.

Onnela, Jukka-Pekka, Toyli, J and Kaski, Kimmo
(2009)
Tick size and stock returns.
Physica A: Statistical Mechanics and its Applications, 388 (4).
p. 441.
(Cited 2 times in Web of Science.)
Link to full text available through this repository.

Abstract

Tick size is an important aspect of the micro-structural level organization of financialmarkets. It is the smallest institutionally allowed price increment, has a direct bearingon the bid–ask spread, influences the strategy of trading order placement in electronicmarkets, affects the price formation mechanism, and appears to be related to the long-termmemory of volatility clustering. In this paper we investigate the impact of tick size on stockreturns.Westart with a simple simulation to demonstrate how continuous returns becomedistorted after confining the price to a discrete grid governed by the tick size.Wethen moveon to a novel experimental set-up that combines decimalization pilot programs and crosslistedstocks in New York and Toronto. This allows us to observe a set of stocks tradedsimultaneously under two different ticks while holding all security-specific characteristicsfixed. We then study the normality of the return distributions and carry out fits to thechosen distribution models. Our empirical findings are somewhat mixed and in some casesappear to challenge the simulation results.

As a step towards understanding whether a private equity governance structure reduces overall agency conflicts relative to a public equity governance structure (as is often argued), this paper describes the contracts between private equity funds and investors, and the returns earned by investors. The paper sets the stage with a puzzle: the average performance of private equity funds is above that of the Standard and Poor's 500 - the main public stock market index - before fees are charged, but below that benchmark after fees are charged. Why are the payments to private equity buyout funds so large? Why does the marginal investor invest in buyout funds? I explore one potential answer (and probably the most controversial): that some investors are fooled. I show that the fee contracts for these funds are opaque. Considering this and the way that compensation contracts bury, in details, costly provisions that are difficult to justify on the basis of proper incentive alignment, it would be premature to assert that the agency conflicts are lower in private equity than in public equity.

This article describes compensation contracts in private equity. It shows that they may not align interest between the investors and fund managers as much as commonly thought. Certain clauses appear as potentially hazardous for investors and others exacerbate conflicts of interest.

I cover the different methods to measure risk and return of investing into private equity (also called buyout). However, the reader may bear in mind that the challenges and methods are very similar for other assets classes such as venture capital, real estate or mezzanine. In terms of vocabulary, I call a (portfolio) company the entity receiving the financing from a private equity fund, and private equity firm the organization running private equity funds (e.g. KKR funds, Bain capital funds).

The capital committed to private equity funds increased from $3.5 billion in 1984 to over $300 billion in 2007 and more than $1 trillion of assets are estimated to be in the hand of private equity funds in 2007. This growth has often been attributed to a widespread belief of stellar performance and low risk but no rate of return has even been shown in support of this belief (only some multiples or IRRs) and no risk measure has been computed. Recent academic evidence which I document below is at odd with this belief.

In this chapter, I review studies of risk and return of private equity which I complement with original empirical work. I distinguish between four types of data. Each represents a different level of challenge for measuring risk and return. From the easiest to the most difficult: i) publicly traded vehicles, ii) round valuation data [the econometrician knows the initial and final value of the investment but does not know the time-series of investment values; there is no intermediary cash-flows], iii) investment level [cash flows realized by the fund from an investment], and iv) fund level [cash flows faced by investors for their stake in a fund]. In the last two cases, the econometrician does not have a correspondence between each amount distributed and invested. These two cases require the same method, are most challenging and are the most relevant in practice.

The performance of private equity funds as reported by industry associations and previous research is overstated. A large part of performance is driven by inflated accounting valuation of ongoing investments and we find a bias toward better performing funds in the data. We find an average net-of-fees fund performance of 3% per year below that of the S&P 500. Adjusting for risk brings the underperformance to 6% per year. We estimate fees to be 6% per year. We discuss several misleading aspects of performance reporting and some side benefits as a first step toward an explanation.

It is already 20 years since the collapse of communism in central and east eastern Europe. Changes that began in Poland with the Solidarity movement led to the fall of the Berlin Wall. Events signalled not only the collapse of communism, but also the start of the transition from a centrally planned economy to a market economy, as well as the opening of new markets for retailing. I grew up in Gdansk, Poland, near the gate to the Gdansk Shipyard renowned, for the Solidarity strikes in the 1980s. It was during the final decade of the communist system. A reader from western Europe may not be aware of the conditions behind the Iron Curtain, and so in this short article I would like to share some of my shopping experiences from that period. I must confess that nowadays some of the issues described below appear quite curious, even to me. Nevertheless, this fairly recent past is likely to influence current Polish consumers who remember that time, even though now they are able to shop in an environment not much different from the rest of western Europe. Today, while visiting the shopping malls that are mushrooming across the cities, the supermarkets, small chain shops and grocery markets, it is hard to believe how differently everything looked just over 20 years ago.

Piotrowicz, Wojciech
(2009)
Technology in E-business.
In: Reynolds, Jonathan, (ed.)
E-Business. A Management Perspective.
OUP.
Link to full text available through this repository.

Abstract

About this book: Presents the subject of e-business from a managerial approach, with a strong theoretical basis and critical underpinning which encourages academic rigour yet maintains its accessible style, ensuring students understand both the academic and practical principles underlying ebusiness. Wide use of up to date international examples and case material to help contextualise the world of e-business using brands that students can relate to. Concise coverage of a broad range of topics that presents ebusiness from a holistic approach and captures the latest trends in the subject area, ensuring students are aware of the mainstream nature of ebusiness in todays marketplace. Provision of additional supporting materials including lecture guide, customisable PowerPoints, bank of additional case studies and author blog.

Chapter 03: Technology in e-businessThe purpose of this Chapter has been to present the main issues related to technology in e-business. Technology covers much more than just hardware. Software applications and standards play an important role in integrating internal and inter-organizational data exchange and processes. In this Chapter, current and major trends in systems availability, such as web services and SOA were introduced and summarized, as both aim to create flexible IT systems which can be modified as and when required. In IT development for e-business, selection standards are important, both formal as well as those developed by informal groups such as consortia. Payment in e-business is one of the areas where standardization is needed to provide secure financial transfers. Finally, this Chapter introduced the concept of IT evaluation, indicating the importance of looking at the benefits, costs and risks associated with system selection and implementation.

Purpose - The purpose of this paper is to introduce sustainability as a new dimension of information systems (IS) evaluation. Customers, policymakers and business partners increasingly require the monitoring and reporting of the organisational impact on sustainability. However, traditional IS evaluation approaches are not able to capture the impact of information technology (IT)/IS on sustainability, especially in relation to social and environmental dimensions, so the authors want to stimulate discussion and research related to this area.

Design/methodology/approach - This paper is conceptual. However, it is based on the results of an existing related research project focussed on supply chain evaluation. Findings In order to stimulate discussion and research, the authors propose a framework that was originally developed to evaluate supply chain practices, in which IS often play a major role. The framework is built on three dimensions economic, social and environmental which are divided further into three sub-dimensions. It can be used as a starting point to develop a framework for sustainability-oriented IS evaluation.

Research limitations/implications - The framework was originally developed for supply chain evaluation; however, it has generic features that can be adjusted or modified in order to be applied to a whole range of IT/IS initiatives

Practical implications - Sustainability and its new dimensions create new challenges for information systems evaluation. Companies require frameworks and tools that can help them to measure and evaluate the impact of IS on sustainability. The researcher's role is to answer such needs and focus on this emerging research topic; this paper aims to stimulate such research.

Originality/value - Sustainability is a new dimension in IT/IS evaluation. Current approaches do not include all sustainability dimensions (environmental aspects are excluded, evaluation of the social impact is limited).

This paper is based on the paper submitted by the authors for the European and Mediterranean Conference on Information Systems EMCIS 2008, 25-26 May, Al Bostan Rotana, Dubai (ISVN 978-1-902316-58-1). For more details about EMCIS, please visit www.emcis.org

Design/methodology/approach – Multi-case study design was applied. The benefits reported in the companies were analysed and classified according to taxonomies from the information systems discipline. Finally, a new benefits classification was proposed. The framework was developed based on information systems literature.

Findings – The research confirmed difficulties with benefits evaluation, as, apart from operational benefits, non-financial, intangible benefits at strategic level were also identified. Traditional evaluation methods are unable to capture all benefits categories, especially at strategic level. New taxonomy was created, which allows evaluation of the complex e-procurement impact. In the proposed taxonomy, e-procurement benefits are classified according to their level (operational, tactical, strategic), area of impact, applying scorecard dimensions (customer, process, financial, learning and growth). In addition the benefits characteristic is captured (tangible, intangible, financial and non-financial).

Research limitations/implications – Research is based on four case studies only. Findings are specific to case companies and the environment in which they operate. The framework should be tested further in different contexts.

Practical implications – The new taxonomy allows evaluation of the complex e-procurement impact, demonstrating that benefits achieved do not concern merely the financial impact. The framework can be applied to preparing new systems implementation as well as to evaluating existing systems.

Originality/value – The paper applies information systems frameworks to the electronic procurement field, which allows one to look at e-procurement systems considering its complex impact. The framework can also be used to evaluate different systems, not simply e-procurement.

The paper presents the results of a doctoral research related to Information Systems evaluation in context. The authors propose changes in the context, the new level of contextual analysis was added: the system context located between the internal and external context. The system context reflects the fact that the case companies are business units and parts of the corporations and IS evaluation is influenced by the corporation, Three levels of context analysis can be used in case of IS evaluation in complex structures, such as corporations or supply chain.

Retailers recognize that greater understanding of customers can enhance customer satisfaction and retail performance. This article seeks to enrich this understanding by providing an overview of existing consumer behavior literature and suggesting that specific elements of consumer behavior—goals, schema, information processing, memory, involvement, attitudes, affective processing, atmospherics, and consumer attributions and choices—play important roles during various stages of the consumer decision process. The authors suggest ways in which retailers can leverage this understanding of consumer behavior. Each of these conceptual areas also offers avenues for further research.

Despite impressive advances in automated production technology, manufacturing industry is still heavily reliant on conventional processes, particularly in processes designed for materials removal in which controlled shearing of the work-piece occurs. Such processes typically involve the use of automated computer controlled machining centers, which, in principle, are capable of sustained periods of unattended operation. However, the quality of the finished product, in terms of its conformance to dimensional and surface finish requirements as specified in the design, is strongly dependent upon the condition of the cutting tools used. A number of tool life management systems have been designed and engineered and are employed in production environments today, but these are usually based on expired life criteria and are of limited applicability. Crucially, in the context of increasing product life cycles, the disguarding of tools earlier than may be necessary is wasteful, expensive and inconsiderate to the environment. More sophisticated designs do exist, typically based on advanced technologies, such as acoustic emission or spindle torque sensors, for dynamically sensing tool condition during operation. Such systems are potentially more useful but still only indicate that some aspect of the cutting process has changed and usually require human intervention.

Nationalisation of the human resource is the desired and articulated policy of all rulers of countries that form the Gulf Cooperation Council (GCC). In reality, however, the policy has been dogged with difficulties in implementation from its inception as it faces seemingly insurmountable hurdles, such as a demographic imbalance caused by a high proportion of expatriates working in the region, the challenges of public and private sector employment, the role of national women in society, the reliance on expatriate employment, high rates of unemployment among poorly trained nationals, and cumulatively the need for sustainable development as well as the effective governance of human capital. Within this context, governments, including the government of the United Arab Emirates (UAE), have decided to tackle the challenges faced by Emiratisation as a nationalisation endeavour. This paper examines ‘Emiratisation’, with a view to evaluating the success of the policy as well as its shortcomings to this point in time. Furthermore, the paper draws light on principles which may direct the strategy for human resource management (HRM) in this context. The outcomes of the research are of potential value, in particular to human resource departments (HRD) in the GCC seeking to nationalise a proportion of their workforce.

This paper outlines a mechanism for the development and implementation of a strategic performance management framework within government departments in the United Arab Emirates (UAE). The work also addresses corporate performance management for governmental organizations dealing with service and operations with the aim of evaluating existing performance management systems and identifying major issues and challenges affecting their implementation. This research has enabled the identification of the most appropriate systems and indicators for utilization within all government divisions. Thus, through the use of effective performance management systems, an organization can develop performance related strategies and generate accurate and timely reports pertinent to organizational management activities. Consequently, organizational leaders and senior managers are equipped for decision-making based on proper measures, with the aim of boosting organizational efficiency and productivity.

Public sector organisations face a momentous task of constant change and upgrade to their services in today’s dynamic and hyper turbulent market place. Owing to the hyper active nature of the market place, the pace of change has never been greater than in the current business environment and is becoming a constant feature of organisational life. Coupled with massive economic expansion, increased globalisation and massive transnational flow of information, there is colossal pressure on public sector organisations to relentlessly instigate change.

This paper focuses on one such change, the establishment of an automated road tolling system wherein the organisation (roads and traffic agency) is faced with the task of resolving the traffic woes of the city of Dubai in the United Arab Emirates (UAE) and is working towards the integration of the entire road and transport network.

The aim of this paper is to examine ways of improving the effectiveness of public sector organisations to manage change. This was explored by investigating how the road and traffic agency is managing change, especially change related to the implementation of advanced technology, evaluate the consequences of this change on the existing network and stakeholders and to appraise the management strategy deployed to address the transport network.

The findings of this paper indicate key emerging issues adversely impacting the change approach deployed. These include prioritisation issues, timing of the change activities, time allotted to the change activities and issues pertaining to monitoring and feedback of change.

The United Arab Emirates (UAE) is one of the most diverse nations in the world, with over one hundred nationalities living in an area no larger than the US state of Texas. In such an envorinment, where citizens amount to only one fifth of the country’s population, supported by an expatriate population with an assortment of cultures, the development of a university education system to accommodate the needs of the inhabitants could never be ‘one-size-fits-all.’ This paper explores the influence of globalisation on higher education and its impact on citizens of the United Arab Emirates. The paper further investigates the challenges they face in learning in English, a second language to them; motivational problems ensuing from experiencing a paradigm shift in the classroom; cultural challenges they experience in, for example, having to learn from imported textbooks resulting in difficulty in content contextualisation; dealing with differences in values and morals, between, for example, foreign educators and indigenous students.

Reynolds, Jonathan and Hristov, Latchezar
(2009)
Are there Barriers to Innovation in Retailing?
The International Review of Retail, Distribution and Consumer Research, 19 (4).
pp. 317-330.
Link to full text available through this repository.

Abstract

Recent data from the Community Innovation Survey challenge some of the conventional arguments that retailing is inherently less innovative than other sectors within developed economies. According to the data, firms in the UK retail sector are now converging on the all-sector average. Drawing on qualitative research undertaken within retail firms, this article begins by examining some of the implications of this and the reasons why survey data may still underestimate the extent of innovation in the sector. One of the potential contributory factors to an increase in reported levels of innovation may be a reduction in barriers to innovation. In a new analysis of the data, the article explores the nature and incidence of such barriers in the UK. It judges that, although barriers were already perceived to be low, further reductions may have played a part in stimulating innovation. However, amongst other factors, it also notes that the sector still lacks any reliance upon universities and HEIs to assist with strategicinnovation. The article further concludes that present economic conditions are likely to detrimentally affect a number of the cost and market factors, which are the most significant barriers to innovation in the sector.

Item type

Article

Subject(s)

UNSPECIFIED

Uncontrolled keywords

Retailing; Innovation; Community Innovation Survey; Barriers to innovation; Business engagement;

In this paper, we analyze equilibria in competitive environments under constraints across players’ strategies. This means that the action taken by one player limits the possible choices of the other players. In this context, the usual approach to show existence of equilibrium, Kakutani’s fixed point theorem, cannot be applied directly. In particular, best replies against a given strategy profile may not be feasible. We devise a new fixed point correspondence to deal with the feasibility issue.Our main motivation to study this problem of co-dependency comes from the field of supply chain planning. A set of buyers is faced with external demand over a planning horizon, and to satisfy this demand they request inputs from a set of suppliers. Both suppliers and buyers face production capacities and they plan their own production in a decentralized manner. A well-known coordination scheme for this setting is the upstream approach where the plan of the buyers is used to decide the request to the suppliers. We show the existence of equilibria for a (shared) inventory cost minimization version of this coordination scheme in which a distribution center manages the inventory of the inputs. However, we illustrate with an example that the centralized solution is not, in general, an equilibrium, suggesting that regulation may be needed.

Purpose - This study attempts to understand the nature and activities of growth-oriented women-owned businesses in the East of England by highlighting the problems faced by women entrepreneurs during the growth process.

Design/methodology/approach - The approach analysed the main growth factors and their influence on the adoption of different growth strategies. An online questionnaire was designed using Snap survey software™, with results exported to SPSS™ for analysis. Both quantitative and qualitative data were collected via a variety of scaled, open-ended, rank order, dichotomous, multiple choice and open questions.

Findings - The research indicates that most do not opt to develop growth-oriented businesses, choosing instead small, non-scalable, locally focused businesses providing services or operating in low-tech industries. Women who are growth-oriented appear to be inhibited due to a lack of access to, and control over such resources as, capital, business premises, information and technology, production inputs, appropriate childcare, qualifications, experience, training facilities and appropriate assistance from business development agencies. Non-effective accumulation and use of social capital hinders access to appropriate decision-making circles, and limits the probability of accessing critical management and financing resources, especially through the venture capital industry.

Practical implications - This research has implications for government or other business development agencies seeking to understand the growth patterns and problems of women-owned enterprises in the East of England.

Originality/value - There are few British studies that have focussed on growth oriented women-owned businesses. This study contributes to the body of knowledge by attempting to understand the nature and activities of such business, by analysing the main growth factors and their influence on different growth strategies.

Item type

Article

Subject(s)

UNSPECIFIED

Uncontrolled keywords

Business development; England; Entrepreneurialism; Small to medium-sized enterprises; Women

Background: The organizational context in which healthcare is delivered is thought to play an important role in mediating the use of knowledge in practice. Additionally, a number of potentially modifiable contextual factors have been shown to make an organizational context more amenable to change. However, understanding of how these factors operate to influence organizational context and knowledge use remains limited. In particular, research to understand knowledge translation in the long-term care setting is scarce. Further research is therefore required to provide robust explanations of the characteristics of organizational context in relation to knowledge use.Aim: To develop a robust explanation of the way organizational context mediates the use of knowledge in practice in long-term care facilities.Design: This is longitudinal, in-depth qualitative case study research using exploratory and interpretive methods to explore the role of organizational context in influencing knowledge translation. The study will be conducted in two phases. In phase one, comprehensive case studies will be conducted in three facilities. Following data analysis and proposition development, phase two will continue with focused case studies to elaborate emerging themes and theory. Study sites will be purposively elected. In both phases, data will be collected using a variety of approaches, including non-participant observation, key informant interviews, family perspectives, focus groups, and documentary evidence (including, but not limited to, policies, notices, and photographs of physical resources). Data analysis will comprise an iterative process of identifying convergent evidence within each case studyand then examining and comparing the evidence across multiple case studies to draw conclusions from the study as a whole. Additionally, findings that emerge through this project will be compared and considered alongside those that are emerging from project one. In this way, pattern matching based on explanation building will be used to frame the analysis and develop an explanation of organizational context and knowledge use over time.An improved understanding of the contextual factors that mediate knowledge use will inform future development and testing of interventions to enhance knowledge use, with the ultimate aim of improving the outcomes for residents in long-term care settings.

In theoretical ecology, simple stochastic models that satisfy two basic conditions about the distribution of niche values and feeding ranges have proved successful in reproducing the overall structural properties of real food webs, using species richness and connectance as the only input parameters1, 2, 3, 4. Recently, more detailed models have incorporated higher levels of constraint in order to reproduce the actual links observed in real food webs5, 6. Here, building on previous stochastic models of consumer–resource interactions between species1, 2, 3, we propose a highly parsimonious model that can reproduce the overall bipartite structure of cooperative partner–partner interactions, as exemplified by plant–animal mutualistic networks7. Our stochastic model of bipartite cooperation uses simple specialization and interaction rules, and only requires three empirical input parameters. We test the bipartite cooperation model on ten large pollination data sets that have been compiled in the literature, and find that it successfully replicates the degree distribution, nestedness and modularity of the empirical networks. These properties are regarded as key to understanding cooperation in mutualistic networks8, 9, 10. We also apply our model to an extensive data set of two classes of company engaged in joint production in the garment industry. Using the same metrics, we find that the network of manufacturer–contractor interactions exhibits similar structural patterns to plant–animal pollination networks. This surprising correspondence between ecological and organizational networks suggests that the simple rules of cooperation that generate bipartite networks may be generic, and could prove relevant in many different domains, ranging from biological systems to human society11, 12, 13, 14.

What alternative strategies are being pursued by firms to capture profit in global value chains? In what ways are the sources of competitive advantage changing as they move up the value chain from low end to high end work, potentially changing the structure and boundary of the existing industry? This paper examines these questions by focusing on the outsourcing and offshoring of legal services, known as Legal Process Outsourcing (LPO). Legal services were chosen for study in order to highlight the relevance of both technological and institutional factors that influence value chain dynamics. In particular, the study examines how the nature of professions impact on make-or-buy decisions and industry structure. The legal services value chain is conceptualized as consisting of three blocks, namely knowledge and information management (KIM), consultative advice and representation (CAR), and client relationship management (CRM). The study shows that legal services are being unbundled, with the KIM component being separated by ownership and geography from CAR and CRM components. To assess the actual extent of disintegration, the study identifies the conditions under which demand and supply for LPO services is generated. Those conditions on the demand side include the corporatization of law firms and pressures on global corporations to cut legal costs. From the supply perspective, the study identified three distinctive strategies for LPO providers to capture profit, depending on their mode of entry influencing their initial capability mix, and whether or not the value chain is driven by a corporation or a law firm.

What alternative strategies are being pursued by firms to capture profit in global value chains? In what ways are the sources of competitive advantage changing as they move up the value chain from low end to high end work, potentially changing the structure and boundary of the existing industry? This paper examines these questions by focusing on the outsourcing and offshoring of legal services, known as Legal Process Outsourcing (LPO). Legal services were chosen for study in order to highlight the relevance of both technological and institutional factors that influence value chain dynamics. In particular, the study examines how the nature of professions impact on make-or-buy decisions and industry structure. The legal services value chain is conceptualized as consisting of three blocks, namely knowledge and information management (KIM), consultative advice and representation (CAR), and client relationship management (CRM). The study shows that legal services are being unbundled, with the KIM component being separated by ownership and geography from CAR and CRM components. To assess the actual extent of disintegration, the study identifies the conditions under which demand and supply for LPO services is generated. Those conditions on the demand side include the corporatization of law firms and pressures on global corporations to cut legal costs. From the supply perspective, the study identified three distinctive strategies for LPO providers to capture profit, depending on their mode of entry influencing their initial capability mix, and whether or not the value chain is driven by a corporation or a law firm.

How do corporate legal departments and law firms make decisions about ‘making’ or ‘buying’ legal services? In what ways are their decisions governed by the usual criteria and factors identified in economic and managerial theories of the firm? And to what extent are lawyers’ make‐or‐buy decisions affected by professionalism and partnerships that govern the legal profession? This paper addresses these questions by generating five propositions arising out of various theories, concerning(1) the link between task modularity and organizational modularity,(2) knowledge interdependence complicating this link,(3) rent‐seeking, property‐rights, incentive‐alignment,and decision‐making adaptation motives for make‐or‐buy decisions,(4) the impact of managerial hierarchy on make‐or‐buy decision, and (5) the industry‐level distribution of capabilities affecting value chain disintegration. The paper discusses some evidence in legal services in support of these propositions, and raise questions for further research.

Scott, Linda
(2009)
Markets and Audiences.
In: Nord, D, Rubin, Julia Sass, Schudson, M and Hall, D D., (eds.)
The History of the Book in America.
The University of North Carolina Press, pp. 72-90.
ISBN 978-0807832851
Full text not available from this repository.

Irish immigrants to America during the second half of the nineteenth century presented significant challenge to the existing Protestant ruling elite. The provenance, religion and behaviour of the arriving Catholic Irish stood in particular opposition to the morality of the Puritan descendents, an ancient enemy of the Irish, who claimed cultural hegemony over the new United States. The result was a contest of wills over the consumption of goods, public and private, religious and secular. This article seeks to chart historically this clash of religion, politics, gender, race and labour. In doing so, it approaches several issues of interest today. It reframes questions about whether consumption can be a subversive political behaviour, and calls into question schemas in cultural theory about the role of the ‘culture industry’. As the Irish eventually came to participate as fully as their ‘oppressors’ in the new market economy and its burgeoning consumer culture, the outcome of the narrative challenges us to rethink whether oppressed groups reach mainstream respectability as a total ‘sellout’ or as the legitimate ends of revolution.

This chapter from my 2005 book, Fresh Lipstick: Redressing Fashion and Feminism, was dropped for length considerations because it focused on such a short period of time (the war only lasted a little more than four years, while my book was trying to cover 150 years and still be affordable as a purchase). However, many who had read the original draft missed it when the book finally came out, including the peer reviewers. Like any book chapter, however, this one builds on arguments from previous parts of the book, while also setting up expectations for information yet to come. So, I have tried to help readers who have not read the full book along by inserting little signposts that point to evidence, arguments, and even people and campaigns that appeared elsewhere in Fresh Lipstick. Though the chapter stands well on its own, I hope these little additions will make the piece easier to understand by providing further context.

The financial crisis of 2008 and the resulting recession caught many companies unprepared and, in so doing, provided a stark reminder of the importance of effective risk management. While academic theory has long touted the benefits of risk management, companies have varied greatly in the ways and extent to which they put theory into practice.

Drawing on a global survey of over 300 CFOs of non-financial companies, the authors report that while most CFOs felt that their risk management programs have significant benefits, the risk management function in general needs more attention. A large percentage of the finance executives surveyed acknowledged that the most important corporate risks extend far beyond the CFO's direct reports, and that risk-based thinking is not incorporated into everyday business activities or corporate strategies. A large majority of executives also said they were seeking a more widespread understanding of risk throughout their organizations—and many confessed their firms' inability, or lack of interest, in evaluating their own risk management functions. At the same time, the efforts of most companies to develop enterprise-wide risk management (ERM) programs were said to fall well short of the comprehensive and highly coordinated programs envisioned by the proponents of such programs.

Three areas of opportunity were clearly identified as having potential to improve corporate risk management in ways that increase firm value over an entire business cycle:

•Incorporate risk management thinking into the strategic planning process. Line executives, and not just technicians, need to be sensitive to risks, thereby building flexibility into the firm's business plan and its execution.•Clearly define the objectives of the risk management function, in part by developing appropriate benchmarks. The risk management process should be subject to the same rigorous evaluation process that is used when measuring risks throughout the business.•Instill a risk management culture throughout the organization. While an effective risk management function is necessary, only when employees at all levels of the company embrace risk management as part of their daily operations will the firm get maximum value from risk management.

Geoengineering, or the deliberate large-scale manipulation of the planetary environment to counteract anthropogenic climate change, has been suggested as a new potential tool for addressing climate change. Efforts to address climate change have primarily focused on mitigation, the reduction of greenhouse gas emissions, and more recently on addressing the impacts of climate change—adaptation. However, international political consensus on the need to reduce emissions has been very slow in coming, and there is as yet no agreement on the emissions reductions needed beyond 2012. As a result global emissions have continued to increase by about 3% per year (Raupach et al. 2007), a faster rate than that projected by the Intergovernmental Panel on Climate Change (IPCC) (IPCC 2001)7 even under its most fossil fuel intensive scenario (A1FI8) in which an increase in global mean temperature of about 4°C (2.4 to 6.4°C) by 2100 is projected (Rahmstorf et al. 2007). The scientifi c community is now becoming increasingly concerned that emissions will not be reduced at the rate and magnitude required to keep the increase in global average temperature below 2°C (above pre-industrial levels) by 2100. Concerns with the lack of progress of the political processes have led to increasing interest in geoengineering approaches. This Royal Society report presents an independent scientifi c review of the range of methods proposed with the aim of providing an objective view on whether geoengineering could, and should, play a role in addressing climate change, and under w

This paper provides new evidence on the effects of overseas FDI on the skill-mix of multinational firms’ home-country operations. The analysis exploits China’s WTO accession to identify the impact of outward investment into a low-wage economy, and uses plant-level data to investigate changes in industrial structure within firms driven by plant closures. As predicted by models of vertical FDI the paper demonstrates that overseas investment in low-wage economies is associated with asymmetric effects on workers in low and high-skill industries in the home economy, and in particular with firms closing down plants in low-skill industries.

Smart, Janet and Kito, Tomomi
(2009)
Organizational structures for managing major programmes.
In: 28th International Conference on Organizational Science Development: New technologies, new challenges, 25-27 March, 2009, Portoroz, Slovenia.
(Unpublished)
Full text not available from this repository.

In many real-world networks, the rates of node and link addition are time dependent. This observation motivates the definition of accelerating networks. There has been relatively little investigation of accelerating networks and previous efforts at analyzing their degree distributions have employed mean-field techniques. By contrast, we show that it is possible to apply a master-equation approach to such network development. We provide full time-dependent expressions for the evolution of the degree distributions for the canonical situations of random and preferential attachment in networks undergoing constant acceleration. These results are in excellent agreement with results obtained from simulations. We note that a growing nonequilibrium network undergoing constant acceleration with random attachment is equivalent to a classical random graph, bridging the gap between nonequilibrium and classical equilibrium networks.

Social commerce is an emerging trend in which online shops create referral hyperlinks to other shops in the same online marketplace. We study the evolution of a social commerce network in a large online marketplace. Our dataset starts before the birth of the network (at which points shops were not linked to each other) and includes the birth of the network. The network under study exhibits a typical power-law degree distribution. We empirically compare a set of edge formation mechanisms (including preferential attachment and triadic closure) that may explain the emergence of this property. Our results suggest that the evolution of the network and the emergence of its power-law degree distribution are better explained by a network evolution mechanism that relies on vertex attributes that are not based on the structure of the network. Specifically, our analysis suggests that the power-law degree distribution emerges because shops prefer to connect to shops with more diverse assortments, and assortment diversity follows a power-law distribution. Shops with more diverse assortments are more attractive to link to because they are more likely to bring traffic from consumers browsing the WWW. Therefore, our results also imply that social commerce networks should not be studied in isolation, but rather in the context of the broader network in which they are embedded (the WWW).

In this Brief Report, we propose an index of user similarity, namely, the transferring similarity, which involves all high-order similarities between users. Accordingly, we design a modified collaborative filtering algorithm, which provides remarkably higher accurate predictions than the standard collaborative filtering. More interestingly, we find that the algorithmic performance will approach its optimal value when the parameter, contained in the definition of transferring similarity, gets close to its critical value, before which the series expansion of transferring similarity is convergent and after which it is divergent. Our study is complementary to the one reported in [ E. A. Leicht, P. Holme and M. E. J. Newman Phys. Rev. E 73 026120 (2006)], and is relevant to the missing link prediction problem.

Wind power is an increasingly used form of renewable energy. The uncertainty in wind generation is very large due to the inherent variability in wind speed, and this needs to be understood by operators of power systems and wind farms. To assist with the management of this risk, this paper investigates methods for predicting the probability density function of generated wind power from one to ten days ahead at five U.K. wind farm locations. These density forecasts provide a description of the expected future value and the associated uncertainty. We construct density forecasts from weather ensemble predictions, which are a relatively new type of weather forecast generated from atmospheric models. We also consider density forecasting from statistical time series models. The best results for wind power density prediction and point forecasting were produced by an approach that involves calibration and smoothing of the ensemble-based wind power density.

We analyze a market game where traders are heterogeneous with respect to their rationality level and have asymmetric information. The market mechanism results into a statistical equilibrium, where traders randomise among their available actions due to their limited rationality. We provide a necessary and sufficient condition for convergence of statistical to strategic equilibria of market games, when traders become more informed and increasingly more rational.

Although consumer finance is a substantial element of the economy, it has had a smaller footprint within financial economics. In this review, I suggest a functional definition of the subfield of consumer finance, focusing on four key functions: payments, risk management, moving funds from today to tomorrow (saving/investing), and from tomorrow to today (borrowing). I provide data showing the economic importance of consumer finance in the American economy. I propose a historical explanation for its relative lack of attention by financial economists and in business school curricula based on historic geographic and gender splits between business and consumer studies. I review the literature in consumer finance, organized by its focus on the consumer, financial institutions, and the government. This work is spread out between economics, marketing, psychology, sociology, technology, and public policy. Finally, I suggest a number of open research questions.

Kinecta Federal Credit Union has the opportunity to purchase Nix Check Cashing as part of their "blue ocean" strategy to reach the financially underserved and increase credit union membership and deposits. But they face financial as well as reputational risk. Check cashing, payday lending and other alternative financial services are maligned in mainstream financial circles. This case asks students to evaluate both organizations, their respective industries, and the proposed $45 million deal and determine whether or not it makes sense for Kinecta to purchase Nix.

We review a wide variety of programs that support savings by families, in particular by low- and moderate-income families. These programs range from ones that literally compel families to save, to those that make it hard not to save, make it easier to save, provide financial incentives to induce savings, leverage social networks to support savers, and finally, to programs that excite people to saving. These programs involve a number of different stakeholders, including governmental entities, social intermediaries, non-profit organizations, and for-profit firms including financial institutions. They embody a number of different assumptions about incentives, drawing from economics, psychology, and sociology. We describe examples of each program and provide some information on their economics and effectiveness. Our goal is not to identify the "best" program, but rather to lay out the range of innovations to meet the needs of heterogeneous potential savers.

U

This paper examines the optimal design of climate change policies in the context where governments want to encourage the private sector to undertake significant immediate investment in developing cleaner technologies, but the carbon taxes and other environmental policies that could in principle stimulate such investment will be imposed over a very long future. The conventional claim by environmental economists is that environmental policies alone are sufficient to induce firms to undertake optimal investment. However this argument requires governments to be able to commit to these future taxes, and it is far from clear that governments have this degree of commitment. We assume instead that governments cannot commit, and so both they and the private sector have to contemplate the possibility of there being governments in power in the future that give different (relative) weights to the environment. We show that this lack of commitment has a significant asymmetric effect. Compared to the situation where governments can commit it increases the incentive of the current government to have the investment undertaken, but reduces the incentive of the private sector to invest. Consequently governments may need to use additional policy instruments – such as R&D subsidies – to stimulate the required investment.

This paper develops a general theoretical framework within which a heterogeneous group taxpayers confront a market that supplies a variety of schemes for reducing tax liability, and uses this framework to explore the impact of a wide range of anti-avoidance policies. Schemes differ in their legal effectiveness and hence in the risks to which they expose taxpayers - risks which go beyond the risk of audit considered in the conventional literature on evasion. Given the individual taxpayer’s circumstances, the prices charged for the schemes and the policy environment, the model predicts (i) whether or not any given taxpayer will acquire a scheme, and (ii) if they do so, which type of scheme they will acquire. The paper then analyses how these decisions, and hence the tax gap, are influenced by four generic types of policy:• Disclosure – earlier information leading to faster closure of loopholes;• Penalties – introduction of penalties for failed avoidance;• Policy Design – fundamental policy changes that design out opportunities for avoidance;• Product Register - the introduction of GAARs or mini-GAARs that give greater clarity about how different types of scheme will be treated.The paper shows that when considering the indirect/behavioural effects of policies on the tax gap it is important to recognise that these operate on two different margins. First policies will have deterrence effects – their impact on the quantum of taxpayers choosing to acquire different types schemes as distinct to acquiring no scheme at all. There will be a range of such deterrence effects reflecting the range of schemes available in the market. But secondly, since different schemes generate different tax gaps, policies will also have switching effects as they induce taxpayers who previously acquired one type of scheme to acquire another. The first three types of policy generate positive deterrence effects but differ in the switching effects they produce. The fourth type of policy produces mixed deterrence effects.

V

The relationship between tax authorities and large corporate taxpayers is a concern world-wide as can be seen from the 2008 OECD Study into the Role of Tax Intermediaries. In the United Kingdom, HMRC have been developing a risk rating approach to tax risk management as part of their Review of Links with Large Business. The approach is designed to promote an enhanced relationship between HMRC and the taxpayer, based on trust and transparency. The objectives include the improvement of resource allocation and the encouragement of companies to consider their position so as to achieve the benefits of low risk rating, which may involve altering their tax planning strategy. In addition, new approaches to tax avoidance legislation such as targeted anti-avoidance rules and principles-based legislation are being introduced or considered. This article discusses a survey of tax directors in which the authors used detailed tax planning scenarios to investigate the views of tax directors on the impact and success or otherwise of these new approaches. The views of tax directors are only one factor in judging the success of these developments, but given that one aim of current tax policy is an enhanced relationship with corporate taxpayers, directors’ views are significant in assessing the progress being made. The article analyses these views and comments on these new approaches to tax risk management.

Vella, John and Prentice, Dan
(2009)
Some aspects of capital maintenance law in the UK.
In: Tison, M, De Wulf, H, Van der Elst, C and Steennot, R, (eds.)
Essays in honour of Eddy Wymeersch - Perspectives in Company Law and Financial Regulation.
Cambridge University Press.
ISBN 978-0521515702
Full text not available from this repository.

The borrowing and application of concepts and theories from underlying disciplines, such as psychology and sociology, is commonplace in organization theory. This article critically reviews this practice in organizational research. It discusses the borrowing of theoretical perspectives across vertical (cross-level) and horizontal (cross-context) boundaries and makes an associated distinction between theories in organizations and theories of organizations. It also explicates several unintended consequences and metatheoretical challenges associated with theory borrowing and highlights the legitimate reasons and ways for borrowing theories. By way of example, this article reviews how theories and concepts have been borrowed and applied in organizational research from two different literatures: individual identity and social movements. Overall, it is argued that treating organizations as social actors is the key to appropriate horizontal and vertical theory borrowing in organizational studies, in that it highlights the distinctive features of the organizational social form and organizational social context.

Graham Molitor's article provides a timely prompt for reflecting on the value of scenario practices, especially given several data sources indicating their usage has increased significantly since 2001 (e.g. Ramirez, Selsky, & van der Heijden, 2008, p.9. Molitor is not alone in his struggle to clarify the effectiveness of scenario practices. Others, including myself, are endeavouring to address similar questions: how to judge effectiveness and what do we mean by effectiveness' when referring to such practices? As he implicitly suggests, his critique does not imply that we should throw the scenario 'baby out with the bathwater'. It is all too easy to agree with some of the criticisms of scenarios raised by Molitor. Three aspects are particularly relevant: The first is that futures work seems to be characterised by highly personalised practices. Such practices can be introduced by someone who thought it was "a good idea" but who failed to fully reflect on the complexity of the situation and bases their choice of techniques on sound theoretical principles. Secondly, as much of scenario work is secret – particularly in military and corporate sectors- and/or difficult to assess, it is very hard to engage in comparative research. Thirdly, common to other practitioner-led fields, scenario practices are blessed with a high degree of innovation and entrepreneurship and cursed by a lack of reliable accounts that render explicitly what has worked and what has not, why and for whom in different settings.

This study takes a broader view of internationalization in retailing within the context of the cross-border transfer of business models based on the case of Seven-Eleven Japan Co. Ltd. The authors acknowledge that it is imperative to take a broader process based view of internationalization in a continually consumer driven global economy, with increasing convergence of information and communication technologies which enable effective management of large networked retail firms. Such a process based view of internationalization has implications through all the stages in the core value chain of the retailer, from sourcing through to logistics, store operations, property management to customer relationships. The research demonstrates how the internationalization of Seven-Eleven Japan Co. Ltd entailed across-the-board continuous adaptation covering all three systems of retail store formats and operating systems, product development and procurement, and supply chains. Accordingly, the study makes a contribution to the standardization versus localization debate in internationalization literature by applying the concept of ‘continuous creative adaptation’ to the case study.

Yakis-Douglas, Basak, Whittington, Richard and Cailluet, Ludovic
(2009)
Four Stubborn Decades of Strategic Planning.
In: Passion for Organizing: 25th European Group for Organizational Studies (EGOS) Colloquium, Barcelona, Spain.
(Unpublished)
Full text not available from this repository.

Abstract

This paper traces the evolution of strategic planning practice through a content analysis of advertisements for strategic planning jobs in the New York Times from 1960 to 2003. We address two issues. First, responding to prominent criticisms of analytical approaches to strategic planning, we consider the role of analysis in strategic planning jobs over time. Second, following the association of the MBA degree with these analytical approaches, we examine the relationship of MBA qualifications to analysis in strategic planning jobs. We find no significant shift from analysis in advertised strategic planning jobs in recent years. The MBA appears strongly associated with analytical strategic planning, but not solely. We conclude that analysis has a robust role in strategic planning and discuss implications for strategy practice, research, and education.